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Forex: U.S. Market Summary

Posted by Joseph Trevisani on Sep 13, 2013 4:12:00 PM

Euro

 

The euro opened in New York at 1.3282 (8:00 am) having traded down to 1.3265 in Tokyo on a report from the Japanese news service Nikkei, later picked up by Reuters, that Larry Summers would be nominated as the chairman of the Federal Reserve.

Summers, a former economic advisor to President Obama and Treasury Secretary under Clinton is seen as less reliably dovish than Janet Yellen, vice chair of the Fed and the other leading candidate for the Chairmanship of the Fed when Ben Bernanke's term ends at the end of January.

The market had largely discounted the news before the New York open, moving back to 1.3296, and then down to 1.3280 just before the open. The White House issued a denial of the report right at the open and that bounced the euro to 1.3301 by 8:25 am.

Then weaker than forecast retail sales and 'core sales' for August (0.2% vs. 0.5%; 0.2% vs. 0.3%) at 8:30 am, perhaps undermining the Fed case for tapering quantitative easing at the September 18th FOMC, drove the euro to the day's high 1.3321 within ten minutes of the release.

But as on Wednesday and Thursday, selling at the 1.3225 level immediately capped the rally and the euro fell sharply, first to 1.3301, then, following a bounce back to 1.3311, through 1.3300 and down to 1.3254, the day's low by 10:15 am.

The pressure on the euro was dominated by selling in euro/gbp which ran stops at 0.8390 and 0.8380 reaching a low of 0.8357, a level not seen since January 18th.  It was largely this cross generated selling that forced euro to 1.3254.

Weak University of Michigan consumer sentiment at 10:00 am caused a brief price flurry to 1.3276 but the low came a few minutes later. Once the pressure from the cross subsided  demand lifted the euro 1.3280 where it consolidated for 90 minutes  before euro/yen interest   ran it first to 1.3290 then 1.3310 at 2:00 pm before closing at 1.3294.

Charts: Bloomberg

ScreenHunter 1793 Sep. 13 17.29

ScreenHunter 1794 Sep. 13 17.30

Yen

 

Dollar/yen opened in New York at 99.75 (8:00 am) and euro/yen at 132.48.

The White House denial at 8:00 am that a decision had been made to appoint Larry Summers to the Fed Chairmanship pushed the dollar/yen lower in concert with general dollar weakness, and, helped by mediocre retail sales at 8:30 am, first to 99.36 at 8:40 am, which was followed by a bounce back to 99.65 just before the University of Michigan consumer sentiment numbers at 10:00 am.  

After the consumer sentiment release the dollar/yen  moved steadily lower first to 99.24, followed by a pop back to 99.40 at the London close and finally to 99.19 at 2:00 pm and then again at 4:00 pm before coming back to close at 99.38.

The eur/yen traded in a tight range generally above between 132.30 and 132.45 until about 9:20 am despite the pressure on the dollar/yen much of the time.

But the cross broke lower as the euro broke through 1.3300, paused briefly at 132.10 and then 132.00 and dropped to the low of 131.67 over the next 90 minutes before recovering in the afternoon to close at 132.10

WorldWideMarkets

Charts: Bloomberg

ScreenHunter 1795 Sep. 13 17.57

ScreenHunter 1796 Sep. 13 17.57

 

 

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