The NY session saw plenty of action and the USD was the main beneficiary. Early on the story was the SNB as the bank intervened and took EUR/CHF from around 1.5015 to 1.5285 in a heartbeat. They would return shortly after the London close, taking the cross from about 1.5200 towards the 1.5380 highs. The moves in USD/CHF were even more impressive as the pair shot up from 1.0635 to 1.0908 in the first intervention tranche and jumped from 1.0850 to 1.1020 in the second go-around. The intervention saw more USD buying and this helped keep EUR/USD under pressure for the better part of the session.

The next major event was the US Treasury 5-year auction and it was a good one. The bid/cover was 2.58 versus the three-auction average 2.19 and indirect bidders (foreign demand) took 63% of the offering compared with the three-auction average of 35%. The auction suggests demand for US paper remains extremely robust and talk about diversifying away from US assets is unfounded.

Enter the Fed statement. The market was disappointed to hear that the outlook on the economy was unchanged and that the committee would not say explicitly for how long rates would remain at current levels. If that wasn't enough, the Fed also decided against extending their asset purchase programs. The worse than expected economic assessment coupled with no expansion of quantitative easing was decidedly US dollar positive. EUR/USD had been trading near 1.4000 ahead of the communique and promptly knifed down to a 1.3890 low, closing the session near 1.3930 and still under pressure.

Economic data was better than expected and talk of green shoots was prevalent early on. The US core durable goods number, which is capital good excluding defense and aircraft, jumped 4.8% in May and this sent the three-month run rate to -13.5% from -30.1%. This is the number that feeds directly into GDP and suggests that the decline in US 2Q growth will not be as pronounced as previously expected. Stocks liked the number and EUR and the yen crosses were commensurately higher. This all ended on the SNB's second intervention and the Fed press statement.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 6/24 22:45 GMT NZ  Current Account Balance  1Q  -4.026B  -1.310B
  • 6/24 22:45 GMT NZ  Account Deficit-GDP Ratio  1Q  -8.90%  -8.40%
  • 6/25 0:00 GMT AU  Conference Board Leading Index  APR  0.40%  - -