Forex news for North American trading on October 20, 2017:
- Canada retail sales for August -0.3% vs +0.5% exp. USD/CAD shoots higher.
- Canada September consumer price index 1.6% vs +1.7% y/y expected
- Trump: Taylor and Powell together at the Fed an option
- US 2017 fiscal deficit was $665.7 billion vs $585.6 billion a year earlier
- Baker Hughes US oil rig count 736 vs 743 prior
- Davis: Don't want a 'no deal' scenario but we will be ready if it comes
- New York Fed Q3 GDP Nowcast +1.5% vs +1.7% prior
- US September existing home sales 5.39m vs 5.30m expected
- CFTC Commitments of Traders: Cable longs cut back
- CMHC CEO: Canadians have a debt problem
- S&P 500 up 13 points to record 2574
- Gold down $10 to $1280
- WTI crude up 18-cents to $51.47
- US 10-year yields up 7 bps to 2.38%
- GBP leads, CAD lags
A weak retail sales report dashed hopes for a Bank of Canada rate hike and sent USD/CAD more than 130 pips higher. The pair was lower on the day at 1.2480 heading into the data but jumped up to 1.2580 on the initial headlines. That area offered some resistance because it had twice fended off rallies in October. Later in the day, however, it gave way and the gains continued to 1.2620, the best level since Aug 31.
EUR/USD was on an upswing as New York arrived and hit 1.1820 but it was all downhill from there as it sagged into the London close, when it hit a session low of 1.1763. A bounce to 1.1785 came late but all of Thursday's gain was wiped out.
Cable made big moves in Asia and Europe as it performed a 60-pip round trip but it was flat in North America as it opened around 1.3180 and finished there. A minor dip to 1.3160 into the options cut was picked up afterwards but offers at 1.3200 wouldn't give way.
USD/JPY had an upward tilt, along with the unstoppable rise in stocks. The big story under the surface was the bond market as the prospects for a tax cut grow. US 10s are approaching 2.40% and that's one of the reasons USD/JPY was able to break above 113.44, which was the Oct high. After getting above, there wasn't much follow through with a high at 113.57 but there wasn't a reversal either.
NZD has been a major dog over the past two days. A blip higher to 0.7000 early in North America was wiped out and it hit a low of 0.6954 later in a whimper on the way to the finish line.
Have a great weekend.