The Greenback didn’t wake up on the right side of the bed on Monday’s New York trading session as it was bogged down by a triple-whammy of sorts.
Another ICBM test by North Korea, more White House drama, and downbeat U.S. data left the currency ending the month on a downbeat note.
- Trump fired White House communications head Scaramucci
- Two intelligence officials confirm that North Korea “can hit most of United States”
- Chicago PMI down from 65.7 to 58.9 vs. 60.8 forecast
- U.S. pending home sales up by 1.5% vs. projected 0.9% gain
- Canadian RMPI down by 3.7% vs. estimated 3.2% fall
- Canadian IPPI down by 1.0% vs. estimated 0.3% dip
“No WH chaos!” – Trump
The Donald must really miss his stint at The Apprentice because he once again went “You’re fired!” to his White House communications director who has barely spent a week and a half in the role.
As it turned out, Anthony “The Mooch” Scaramucci’s verbal tirade against several senior officials in the administration didn’t sit well with the President himself.
Although Trump tweeted that there is “No WH chaos!” it didn’t seem enough to assure most market watchers that all is well in Washington.
Keep in mind that Trump also just recently booted Reince Priebus as his chief of staff and replaced him with John Kelly. Rumor has it that Kelly had a little something to do with The Mooch’s firing, but maybe we’ll learn more about that in the next episodes. Stay tuned!
North Korea jitters return
Fresh after North Korea’s latest successful ICBM test, a couple of U.S. intelligence officials remarked that Pyongyang “can hit most of the United States.”
The tension between the hermit nation and the U.S. has been heightened in the past few weeks as the Trump administration had been issuing stern warnings against North Korea and even blaming China for not doing its part in keeping the peace. The Pentagon itself even acknowledged that the latest test recorded the longest test flight of North Korea’s missile.
Mixed U.S. data
Uncle Sam’s medium-tier reports were a mix of green and red, with pending home sales beating expectations and the Chicago PMI falling short.For the month of June, pending home sales rebounded 1.5% versus the projected 0.9% gain and the earlier 0.7% decline. However, the National Association of Realtors also reported that sales to investors were at their lowest level for the year and that cash transactions tumbled as well.
Meanwhile, the Chicago PMI chalked up a steeper than expected fall from 65.7 to 58.9 versus the estimated dip to 60.8, reflecting a much slower pace of industry growth. Components revealed that the drop was mostly due to weaker new orders and production, leading the index to snap its five-month climb.
Over in Wall Street, earnings lifted the Dow to a record high but the other stock indices failed to join in the celebrations as end-of-the-month profit-taking also came into play:
- Dow 30 index is up from 60.81 points to 21,891.12 (+0.28%)
- S&P 500 index is down 1.80 points to 2,470.30 (-0.07%)
- Nasdaq fell 26.55 points to 6,348.12 (-0.42%)
Major Market Mover(s):
The Loonie was unable to benefit from the pickup in crude oil and returned some of its recent gains to its peers as leading inflation indicators in Canada printed downbeat results.
USD/CAD popped up to the 1.2500 mark, CAD/JPY retreated to 88.24, EUR/CAD is back up to 1.4780, and GBP/CAD recovered to 1.6505.
The scrilla wasn’t in a good spot either as a combination of political drama and month-end flows weighed on the U.S. currency.
USD/JPY dipped to a low of 110.21, EUR/USD climbed to a high of 1.1846, GBP/USD is testing the 1.3200 handle, and USD/CHF retreated to .9650.
Watch Out For:
- 1:30 am GMT: Japanese final manufacturing PMI (no change from 52.2 expected)
- 2:45 am GMT: Chinese Caixin manufacturing PMI (50.5 expected, 50.4 previous)
- 5:30 am GMT: RBA interest rate decision (Check out Forex Gump’s preview here!)
- 6:00 am GMT: BOJ core CPI (0.2% expected, 0.3% previous)