Forex Daily Recap – Fiber Gained, Shrugging over Dovish ECB StancesTrump called the Fed as a “Stubborn Child”. Today, the Crude prices slipped around 1% over demand concerns boiled out of escalating US-Iran tensions. The April Japanese Leading Economic Index reported higher than market hopes.
The Greenback that opened up near 96.10 levels on Monday kept the downtrend intact throughout the day. The Index had attempted to make jumps in the Asian trading session reaching near 96.20 levels. However, as the day was approaching closing, the USD Index was found clinched near 96 levels. There was only one significant USD event in the economic docket today – Chicago May Fed National Activity Index. The market had expected the Index to report -0.37 points over -0.48 previous figures. Somehow, the actual reports came out as -0.05 points, shocking the analysts.
Meantime, Trump called the Fed as a “Stubborn Child”, quoting over Fed’s last announcement to keep rates unchanged. The US President tweeted that “Now they stick, like a stubborn child” when we need rate cuts, & easing, to make up for what other countries are doing against us. Blew it!”. Anyhow, the Fed has left the door opened for accommodative stance. As the pressure from Trump is increasing, the Central Bank might come up rate cuts in the next month. Despite that, the market attention was towards the upcoming G20 Meeting. Trump and Xi would have some constructive talks over resolving the trade dispute.
The Ninja was slightly lowered in the morning session reaching near 107.26 levels today. The early drop in the pair’s movements came amid positive JPY data released at 05:00 GMT. The April Japanese Leading Economic Index reported higher than market hopes. The Street analysts had estimated the Index to record 95.5 points this time. However, the April Index came around 95.9, 0.42% above the consensus estimates. Adding to that, April Coincident Index reported 102.1 over 101.9 forecasts. Hence, the pair was drifting in the bottom area in the Asian trading session as Japanese yen grew in value. The USD/JPY pair then showcased a slight upliftment marking the day’s high near 107.50 over Greenback upsurge. The minor jump in the USD Index had come after the release of higher-than-expected Chicago May Fed Activity Index.
This major rival that constitutes 50% of the overall Greenback composition kept benefiting out of weakness in the USD Index. Sound Euro-specific events allowed the pair to spread more bullish legs. The German June IFO reports came out at around 08:00 GMT. Out of these IFO reports, only the Expectations was lower than the estimates, reporting 94.2 points. Anyhow, the IFO Business Climate reported 97.4 points over 97.3 points estimates. Also, the Current Assessment recorded 0.8% higher than 100.0 estimates.
Hence, the EUR/USD pair was successful in scoring a three month high near 1.1395 levels. The picture remains pretty weak over the monetary policy front. Draghi had already mentioned his highly dovish stance over the economic outlook. Hence, traders await a near term rate cut mostly before Draghi’s departure by October end.
The Loonie pair continued to slump following the footprints of the stumbling Greenback. During the early hours, the USD/CAD pair was trading low extending last day’s downtrend. Anyhow, the pair took a bounce from 1.3176 levels, day’s lowest point. From there, the pair soared reaching 1.3214 levels marking daily high as positive USD data came out. Today, the Crude prices slipped around 1% over demand concerns boiled out of escalating US-Iran tensions. “The oil market … is turning its attention to the upcoming G20 meeting and the (limited) prospect for a deal, and with that, a renewed focus on slowing demand growth,” said Saxo Bank’s head of commodity strategy Ole Hansen. However, the pair appeared again to approach the day’s low at around 18:15 GMT.