A mixed session for the USD, though one where we have seen the greenback eventually winning out. Aggressive cable buying from sub 1.4200 levels turnaround a steady rise in the ($) index, led by the commodity currencies, which are desperately holding onto the lows from last week. Mixed trade in CAD with oil whipping up and down, but news that Saudi Arabia may restrict Iran tankers prompted some nervous trading with the Doha meeting now just 2 weeks away.
Data-wise, US factory and durable goods orders were on the softer side, but any USD weakness was turned on its head as the Fed’s Rosengren said market perception of 1 or no Fed interest rate hikes this year was surprising and pessimistic. Cable gains topped out around 1.4320, and we may see a deeper retrace in the making. Much depends on EUR/GBP though, where resistance from .8030 has been the GBP spot rate an underlying bid.
EUR/USD gains were threatening a 1.1437 retest, but this may have been deterred for now. AUD has been well offered through the day, with longs trimmed ahead of the RBA meeting overnight. Friday’s lows just under .7600 have been held, but remain vulnerable ahead. NZD/USD has been well contained in the mid .6800s, but fresh calls for a return to more familiar levels in the .6500-.600 area noted. USD/JPY looks to have found some support in the low 111.00s, but we need further stock market strength to garner some momentum on the topside. As such, 110.50-00 levels are not off the table yet.