Forex today: market shrug off Comey news but remain cautious, dollar still firm, US yields breaking up

Ross J Burland FXStreet

The FX space today in the US session was bullish on the greenback yet again that traded as high as 99.72 in the DXY, albeit down -0.04% at the time of writing below the close of 99.65. Risk appetite was damaged by the firing of Comey news as this has been seen to potentially slow down Trump's implementation of plans to make "America great again".

However, as the session got going, rates, the dollar and stocks were firm, shrugging off the N.Korea nuke test threats and the Comey news. The Republican Senator Corker said "the very best route" for Trump is to pick a new FBI director with bipartisan support in congress.

There was little data other than US Import prices that m/m arrived 0.5% v 0.2% and 0.1% previous. US Export prices m/m arrived at 0.2% v 0.1% and 0.1% previous. Fed’s Rosengren hit the wires saying that the Fed should shrink the balance sheet 'relatively soon, supporting three more rate hikes this year alongside the portfolio reduction.

The main movers on the boards were in USDJPY that has been walking higher on the 114 handle, testing 114.20 with the street looking for a potential breakout higher in US real yields. The US 10-year made a high of 2.4141 today above the close of 2.3977 and is up +0.61% at 2.4123 currently. EUR/USD is still trading with a bearish bias with failed attempts post Macron above the 1.10 handle. The range today was narrow between 1.0853 and 1.0898 vs a close of 1.0874 and is virtually flat on the day. Draghi said that the ECB will naturally exit stimulus together with the improvement in the economy and rebound in inflation. He says the easy policy is still needed. GBP/USD remains subdued below the psychological of 1.3000 level. USD/CAD was better offered to 1.3546 lows from 1.3734 the high on WTI bounce from $45.84 to $47.62bbls. As for the antipodeans, AUD/USD was making another lower low for the sixth day in a row as the worst performer in its peer group with base metals still offered. The kiwi is bid in anticipation of a hawkish RBNZ. Gold continues to fade as risk apatite firm and the VIX was testing the 2007 lows.

The day ahead:

The RBNZ will be the main event at 2100GMT: When is the RBNZ and how could it affect NZD/USD?

GMT	Event	Consensus	Previous
Wednesday, May 10
21:00	NZD RBNZ Rate Statement
21:00	NZD RBNZ Interest Rate Decision	1.75%	1.75%
21:00	NZD RBNZ Interest Rate Decision
21:00	NZD Monetary Policy Statement
21:00	NZD RBNZ Press Conference
22:45	NZD Food Price Index (MoM)		-0.3%
23:01	GBP RICS Housing Price Balance		22%
23:50	JPY Bank lending (YoY)	3.2%	3.0%
23:50	JPY Foreign bond investment		¥-1,283.8B
23:50	JPY Foreign investment in Japan stocks		¥258.4B
23:50	JPY Current Account n.s.a.		¥2,813.6B
23:50	JPY Trade Balance - BOP Basis		¥1,076.8B
Thursday, May 11
24h	IDR Waisak Day
01:00	AUD Consumer Inflation Expectation		4.1%
01:10	NZD RBNZ Governor Wheeler Speech
05:00	JPY Eco Watchers Survey: Current		47.4

Key notes from the US session:

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.