Forex today: awaiting FOMC, strong PPI data, dollar better bid, yields up
|Forex today was all in anticipation of the FOMC outcome with a broadly higher dollar while the last bit of data before the announcements came in the form of a PPI beat that gave us the strongest YoY rate in 6 years.
The DXY was closing at the higher end of the range for Tuesday, between 93.7590 - 94.2190, ending at 94.068 for the day, +0.22%. US rates, in the ten years up to around 2bps to 2.41% and in the middle of the range of between 2.37 - 2.42%. Wall Street higher as well with the Dow printing a new record on the back of financials.
The euro was struggling after a poor turnout in the ZEW survey, dropping from 1.1793 highs to 1.1717 the low. GBP/USD was bumping along the lows in NY, falling from 1.3380 the high to 1.3303 despite a strong CPI reading where some of the market had expected, perhaps, a higher beat of the consensus. The yen was picking up a safe haven bid with Wall Street looking toppy with new records set albeit lacking conviction, trading vs the greenback between 113.37 the low and 13.73, handing over to early Asia at 113.50.
As for the commodities, gold was lower, copper/iron ore in consolidation and WTI taking a hit on the back of EIA cutting it's 2018 global demand forecast. USD/CAD was capped on the rally at 1.2892, closing at 1.2869 and printing a low of 1.2812. AUD/USD was faded hard from a high of 0.7580, ending at 0.7559 fro a low of 0.7519 and the Kiwi was mostly holding gains from the 10th Dec rally to 0.6952 recent highs.
Key events in Asia:
- RBA's Governor Philip Lowe Speech
- Westpac Consumer Confidence
- RBA Assistant Governor Kent Speech
Notes from the US session:
- DJIA and S&P 500 extend gains for the second straight session ahead of FOMC
- Crypto Today: Coinbase suspends Litecoin and Ethereum trading
- Gold plummets to lowest level since July at $1236
- EIA: 2017 U.S. crude oil production to rise by 380,000 bpd (vs 370,000 bpd gain previously)
- US November PPI: Broad Gains - Wells Fargo
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