The Greenback failed to join the flight to safety as other lower-yielding currencies like the yen and franc grabbed most of the risk-off gains.
Interestingly enough, the Kiwi was also one of the strongest of the bunch, boosted by yet another pickup in dairy prices.
- Canadian Ivey PMI plummeted from 62.4 to 53.8 vs. 62.0 forecast
- U.S. JOLTS job openings up from 5.79M to 6.04M vs. 5.65M consensus
- New Zealand GDT auction yielded 0.6% gain in dairy prices
- EIA increased oil output forecast to more than 10M barrels per day in 2018
Uncertainties weigh on USD
Economic data from Uncle Sam was actually better than expected yet the dollar barely scored any wins as market watchers appear to be feeling the jitters ahead of Comey’s testimony on Thursday.
You see, the former FBI director whom the Donald fired is scheduled to testify in front of Senate as part of the probe into the U.S. President’s intelligence information leak to Russian officials. In particular, many are eager to find out if he was indeed told by Trump to drop the investigation on former national security adviser Michael Flynn who has allegedly cozied up to Russia.Note that the dollar is already being bogged down by a dismal May NFP reading and lower September rate hike odds, so any proof of wrongdoing on the administration’s end could spur speculations that fiscal reform would be delayed further.
Nonetheless, the JOLTS job openings report printed a higher figure of 6.04 million, up from the earlier 5.79 million and the projected drop to 5.65 million. Dollar traders appeared to shrug this off because they’ve already gotten a glimpse of the latest NFP report.
Flight to safety boosts gold
U.S. equity indices ended another day in the red as market junkies appear to be moving their funds out of the stock market and into safe-havens like gold. As noted in my earlier recap, global bond yields are drifting lower as well.
Apart from speculations regarding Comey’s testimony later this week, traders are also worried about the upcoming U.K. elections and the ongoing rift in the Middle East.
Crude oil made a bit of a recovery even after the U.S. Energy Information Administration projected that output next year will be at 10.01 million barrels per day, up from their earlier forecast of 9.96 million barrels per day.
- S&P 500 index is down 0.23% to 2,429.00
- Nasdaq is down 0.38% to 5,858.38
- Dow 30 index is down 0.19% to 21,138.54
- Gold is up 0.99% to $1,295.45/ounce
Major Market Mover(s):
Even with risk-off flows happening, the higher-yielding Kiwi was able to pocket some wins, thanks to yet another increase in dairy prices.
NZD/USD is up from .7139 to .7190 (+0.74%), EUR/NZD is down 91 pips to 1.5676 (-0.58%), AUD/NZD slipped from 1.0488 to 1.0446 (-0.40%) and GBP/NZD is down 166 pips to 1.7911 (-0.92%).
The yen took advantage of both anti-dollar sentiment and risk aversion to chalk up gains across the board.
USD/JPY dropped from 110.47 to 109.30 (-1.05%), EUR/JPY is down to 123.23 (-0.88%), GBP/JPY is down to 140.80 (-1.20%), and AUD/JPY dropped to 82.11 (-0.70%).
Watch Out For:
- 12:30 am GMT: Australia AIG construction index (51.9 previous)
- 2:30 am GMT: Australia GDP q/q (Check out Forex Gump’s preview here!)
- 6:00 am GMT: Japanese leading indicators (104.4% expected, 105.5% previous)