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ForexLive Americas FX news wrap: Tiff Macklem takes over at the BOC

Forex news for North American trade on May 1, 2020:

Markets:

  • Gold up $13 to $1700
  • WTI crude up 85-cents to $19.69
  • S&P 500 down 81 points, or -2.8%, to 2830
  • US 10-year yields down 1 bps to 0.63%
  • CHF leads, AUD lags

The Bank of Canada appointed former Carney deputy Macklem as governor in a surprise move and he didn’t waste any time in acting like a rookie central banker. He highlighted that negative rates were in the playbook and sent the loonie lower but failed to properly communicate the nuance of what he was trying to say, and that was that he wasn’t planning on using negative rates. USD/CAD gained about 90 pips on the comment and eventually gave back about half of it.

In general, the US dollar was soft early in the day and technicals came into play as EUR/USD broke above the mid-April high of 1.0991 broke and the pair ran to 1.1018 before giving back 40 pips of gains later.

One of the most-mysterious moves of the day was an announcement that the BOE would move the May 7 decision up by 4 hours. As for sterling, it rose sharply yesterday in what looked like heavy fixing demand and as I warned at the time, the trade was to fade it. It almost completely unwound today with cable down 100 pips.

USD/JPY finished the day down 30 pips on risk aversion but the move came almost entirely before the US arrived. The pair did get a small bid ahead of and just after the ISM data, which was a bit better than expected.


The big losers on the day were the antipodeans as they slumped steadily and particularly after London went home. The seasonals aren’t pretty for AUD or NZD.

Have a safe, healthy weekend.

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