December 9, 2022

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BOC tapers, Powell preaches patience

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Forex news for New York trade on July 14, 2021:

Markets:

  • Gold up $19 to $1827
  • US 10-year yields down 6.6 bps to 1.349%
  • WTI crude down $2.52 to $72.73
  • S&P 500 up 5 points to 4374
  • NZD leads, USD lags

It was a packed day of news but it didn’t translate into a straight-forward day of trading. No single theme or news item captured the market’s imagination. Early on, Powell’s words boosted the risk trade and weighed on the dollar but that faded later.

In Canadian dollar trading, the market clearly wanted more in terms of tapering or positioning the BOC for earlier rate hikes but it didn’t come. Macklem stressed higher confidence in the recovery and bumped up growth forecasts but the timeline on the output gap closing stayed in H2 and the loonie fell. Sinking oil prices after looser US inventory data also didn’t help.

USD/JPY was weighed down as the bond market came back to life. Yields were persistently pressured, perhaps with the Democrat’s infrastructure plan to be paid for. Powell’s lack of urgency on inflation was another culprit.

The antipodeans managed to hold onto earlier bids after the RBNZ taper surprise. Aside from oil, commodities were solid.

The euro staged somewhat of a recovery after yesterday’s rout. That’s the name of the game at the moment with few lasting trends as we sort through the summer doldrums.

Forex news for New York trade on July 14, 2021:




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