Dollar Wilts Under Yellen Gaze

The USD dollar was under pressure throughout the Asia session. Fed Chair Janet Yellen’s testimony to Congress was considered to be doveish due to her comment about the Committee adjusting their assessments and the appropriate path to federal funds on changes to their economic outlook.

The fact that the Fed would revise forecast as more data becomes available is a given.  Yet, traders were hoping for a more hawkish tone to the testimony.

When the didn’t get it, the sold US dollars and bought stocks.

EURUSD climbed steadily in Asia rising from 1.1412 to 1.1455 in early European trading.  That was all. It dropped down to 1.1386, close to where it opened today.

The sterling rally, post Yellen got an added boost when Bank of England Monetary Policy Committee member Ian McCafferty expressed a desire for a faster unwind of quantitative easing. The boost was short lived but GBPUSD is still well above the overnight low.

In Asia, the antipodeans climbed on the doveish Yellen testimony and strong China Trade data.  China’s June Trade balance was $42.77 billion vs May 40.70 billion.  Exports rose 11.3%.

AUDUSD traded higher, moving from a low of 0.7676 to 0.7737, where it was at the New York open.  NZDUSD rallied from 0.7248 to 0.7346 and is also at its peak at the start of New York trading.

USDJPY sank from 113.51 to 112.86 on slipping Treasury yields following Ms. Yellen’s speech and then spent the rest of the overnight session either side of 113.00

Oil prices slipped on news that Saudi Arabia exceeded its production quota in June.  The International Energy Agency (IEA) said that several Opec members were exceeding their production quotas.

USDCAD traded in a 1.2727-63 range as it consolidated yesterday’s losses.  The Bank of Canada’s tone and outlook was a tad hawkish which cap USDCAD gains in the short term.

US Jobless Claims data and the Producer Price index (forecast 0.0%, m/m in June) are on tap this morning.  Furthermore, Fed Chair Yellen testifies before the Senate Banking Committee.


FX Ranges for major currency pairs

Close Open High Low
11-Jul-17 12-Jul-17
EURUSD 1.1463 1.1454 1.1488 1.1443
USDJPY 113.83 113.43 113.95 113.32
GBPUSD 1.2846 1.2857 1.2868 1.2813
USDCHF 0.9639 0.9632 0.9643 0.9620
AUDUSD 0.7632 0.7650 0.7662 0.7636
NZDUSD 0.7225 0.7236 0.7241 0.7218
USDCAD 1.2737 1.2736 1.2763 1.2727
GOLD 1220.55 1221.17 1224.29 1218.24
WTI 45.41 45.11 45.55 45.01

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