FX Flows

From the FXWW Chatroom: New Zealand Q4 terms of trade jumped 5.7% as supposed to previous -1.7%. Market was looking for a plus 4%. This is the biggest increase since Q3 2013. However, export volumes fell 5.8% Q/Q while imports up 1.2%. Kiwi unchanged after the number at 0.7192. Strong Aussie data saw money plunged into AudNzd, pushing Kiwi to 0.7156. NzdUsd returned to 0.7180 on back of Trump’s speech.

Australia’s Feb CoreLogic house price jumped to 1.4% from previous month’s +0.7%. Sydney prices jumped 2.6% to 18.4%, fastest annual growth in more than 14 years. But like the Kiwi, AudUsd did nothing. Then a dismal pop of 20 pips after a better than expected Q4 GDP. What did move was the AudNzd cross, up from 1.0663 to 1.0698. Chinese Feb Manufacturing PMI and Caixin number gave Aussie slight boost, took AudNzd to 1.0720. Again, challenged the offers in the 0.7690’s following Trump’s address. Stops in GbpAud caused AudUsd to print 0.7700. Heard nothing on top side but only buy orders reported in the 0.7610-20.

Yields of 10-year UST up 3 basis points on the Tokyo open, momentum funds were seen chewing away offers surrounding 113.00, before advancing to 113.19. UsdJpy continued to edge higher, entered Ichimoku Cloud 113.21. Profit taking ahead of Trump, UsdJpy back to 113-teens. Then excepts published, UsdJpy moved to 112.98; yields pared gains. Heard short term stops below 112.75 and above 113.85. FWIW, decent option transacted last 24 hours concentrating 113.00 strike.

GbpUsd traded down to 1.2363 following trigger of stop sell orders near 1.2370. Once the interests were gone, GbpUsd bounced back. Usd sold on back of excepts, Gbp returned to 1.2390. EurUsd encountered bids in platform from under 1.0560. Touched 1.05555 and bounced.

One American bank was better buyer of UsdCad this morning from 1.3300 amid hawkish comments from Fed’s Dudley, Williams and Bullard. Usd rose to 1.3325 then backed off to 1.3300. Trump speech saw UsdCad towards 1.3290, above the 100-Day SMA 1.3280, we should see some buying surface there. Bank of Canada meets today 10.00 am Toronto. In our The Week Ahead, CIBC  Andrew Grantham wrote the recent data flow is making it harder for the BOC to maintain a dovish leaning, but that doesn’t mean Governor Poloz won’t try to push back at markets that are pricing in almost a 30% chance of a hike by year-end. Look for the statement to continue pointing towards divergent amounts of economic slack in the US and Canada.
(CIBC)
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