Forexlive Americas FX news wrap: Quiet Monday as Fed speak fails to move the needle much

Forex news for NY trading on May 20, 2020.

In other markets:

  • Spot gold, up $.30 or 0.02% $1277.85
  • WTI crude oil futures trading up $.44 or 0.70% at $63.20

In the US stock market to day, the major indices closed lower and did not see positive levels in the day, but they were off low levels as well.  European shares were also lower with the German Dax, France CAC and Italian FTSE MIB hit particular hard.

Interest rates in the US started modestly lower at the start of the day, but ended the session a higher.  

US yields ended modestly higher in trading today

European 10 year benchmark yields were also higher despite the tumble in equities. German 10 year is still below the 0.0% line at -0.087% (up 1.7 bps today)

10 year benchmark yieldsThe session was light on data with only the Chicago National Activity index on the docket. It came in weaker than expectations at -0.45 which was the lowest reading since May 2016. The data has limited impact at its release.   

Fed speakers were the other “events” for the day.  

  • Fed’s Bostic was non-committal as to his projections for rates next although he did not expect the Fed to act anytime soon (one way or the other).  
  • Fed’s Harker was skeptical that the US could grow faster than 2% without more work connecting employers with workers.
  • Vice Chair Clarida’s prepared text was the same as the May 13th and April 9th (or very similar) with the central theme that the Fed was close to inflation and employment goals
  • NY Fed’s Williams said that the policymakers want to maintain a strong labor market, keep inflation low

Each came and went without much of a market reaction. 

Perhaps, the forex market is gearing up for Fed’s Powell who will be the keynote speaker tonight at the Atlanta Fed’s Financial Markets conference (starting at 7 PM ET/2300 GMT).   

Other news came late in the day US said it is creating a 90-day temporary general license for Huawei and 68 entities.  That might ease some anxiety for the market but trade tensions seem to continue to be a concern.

The snapshot the the strongest and weakest currencies at the end of the day show the AUD as the strongest and the USD as the weakest.   Those two currencies held the same rankiings at the start of the day.  Through the day, the AUD gave back some of their gains, while the USD also gave back some of their losses.   

The USD was the weakers

It simply was a quiet Monday of trading.  

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