The NY session saw modest US dollar strength in the face of higher equities and another bad batch of US economic data. The S&P 500 bucked the overall pullback in risk trades and rallied more than +1% as 4Q corporate earnings reports were good enough to keep stocks bid throughout. The rally in US bonds – on a healthy 2-year auction – and gold's close near a still healthy $900/oz were clear indications that risk aversion remains the order of the day.
US data were weak with home prices declining to a fresh cycle low -18.2% annual rate while consumer confidence plunged to a new record low 37.7 in January from 38.6 the prior month. The buck managed to eke out a rally nonetheless. EUR/USD shed about -10 pips and was sitting near 1.3160 at the close. Stops ostensibly lurked into 1.3120/00 and this level was defended vehemently. Topside, the 1.3250 area looks like the next major hurdle.
The yen crosses were lower despite the rally in stocks and the price action here was more in line with the decline in US yields. USD/JPY slipped about -30 pips towards the 88.90/89.00 area while EUR/JPY fell about -45 pips into the 117.00/10 near-term support zone. USD/CAD was just 25 points higher to 1.2300/10 despite the -8% collapse in oil prices as an announced C$40B stimulus package out of Canada looks to be supporting the currency near-term.
Upcoming Economic Data Releases (Asia Session) prev est
- 1/27 23:30 GMT AU Westpac Leading Index (MoM) NOV -0.10% - -
- 1/28 0:30 GMT AU Consumer Prices (QoQ) 4Q 1.20% -0.40%
- 1/28 0:30 GMT AU Consumer Prices (YoY) 4Q 5.00% 3.60%
- 1/28 5:00 GMT JN Small Business Confidence JAN 29.4 - -
