Wall Street fade is due to trade
FX Trader, Loonieviews.net
Summary: Equities headed south from the open in New York today. China/US trade headlines are having an outsized impact on Wall Street and FX markets because traders don’t have any hard data to evaluate.
Although there's precious little fresh data about, last Friday’s nonfarm payrolls report is a distant memory and the next major data point, April CPI, isn’t available until Friday. Today’s JOLTS survey showed job openings increased 346,000 in March but it is third tier data and was ignored.
The US dollar opened in New York flat to slightly lower against the major G10 currencies. However, the whiff of risk aversion from Turkish and UK politics alongside the tariff threat led to broad-based demand. GBPUSD dropped 0.25%, falling as of 1400 GMT, from 1.3191 at the NY open to 1.3050, compared to its NY opening level over skepticism that talks between the Conservatives and Labour would bear any fruit. The intraday GBPUSD technicals are bearish while prices are below 1.3105. The break below 1.3060 (38.2% Fibonacci retracement of April 26, 1.2872 and May 3, 1.3176 range) targets further losses to the 61.8% Fibonacci level of 1.2988.
USDCAD rallied in concert with the broad US dollar demand and the drop in WTI oil prices. The Canada Ivey PMI index was 55.9, higher than the 53.0 forecast which may have served to slow topside moves.
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