Forex headlines for September 16, 2014:
- PBOC pumping 500bn yuan through SLF to top 5 banks
- Opposing headlines on ICM referendum poll send the pound for a ride
- Scottish independence poll shows No side leading 52-48%
- Rumor that the latest Survation Scottish referendum poll has leaked
- Bank of Canada Governor Poloz: Recovery appears to be under way
- Poloz reiterates that Canada is neutral on interest rates
- August 2014 US PPI final demand 0.0% vs 0.0% exp m/m
- Hilsenrath says “considerable time” will stay in the Fed statement
- Japan to lower economic assessmnt in September report – Nikkei
- US ICSC chain store sales w/w -2.6% vs +0.7% prev
- Canadian July manufacturing sales +2.5% vs +1.1% expected
- SNB poll is unanimous on SNB policy moves on Thursday
- French PM Valls says the lower euro has saved thousands of jobs
- NZ dairy auction: Prices unchanged, NZD higher
- UK bookies so confident of “no” vote in Scotland they're already paying out
- Canada to increase sanctions against Russia, says “prepared to do more”
- S&P 500 up 15 points to 1998
- CAD leads, USD lags
The US dollar was slammed down midway through the session on the combination of the China story and dovish talk from Hilsenrath. Far too many people gave Hilsenrath credit when China was the main driver. Goldman said the injection was the equivalent to a 50 bps reserve ratio cut. Before that, the thinking was that China would stay on the sidelines and let the market get squeezed.
The Aussie was the first to rally and it ripped to 0.9111 from 0.9025. The commodity bloc in general was the biggest winner and a more constructive tone from the BOC also gave the Canadian dollar a lift. It's been brutal trying to latch onto a USD/CAD trend lately and the 120-pip reversal in the past two days has been tough to swallow. Maybe it will perk back up after the Fed.
Cable traders were absolutely miffed and frustrated by a wrong headline saying the ICM poll showed the Yes side ahead. The pound was smashed down to 1.6240 and then ripped right back to 1.6275 on the quick correction. Lots of polls scheduled in the day ahead but the latest ones all showed 52-48 for the No side.
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