Market Drivers June 22, 2017
RBNZ keeps rates on hold
USDJPY tests 111
Nikkei -0.14% Dax -0.33%
Oil $42/bbl
Gold $1253/oz.

Europe and Asia:
No Data

North America:
USD Weekly Jobless 8:30
CAD Retail Sales 8:30

In one the quietest sessions in recent memory, majors pairs essentially stood still in Asian and early European trade contained by talk of option expiries no data on the docket.

EURUSD remained within a 15 pip range while cable barely moved 20 points. The only price action was in the USDJPY which dipped below the 111.00 figure on the Tokyo fix and remained supported at those levels.

Earlier in the day RBNZ kicked things off but maintaining its accommodative monetary policy outlook, but the usual jawboning about the high value of the kiwi was generally restrained and the market took that as a positive sign for the currency rallying it 50 pips to .7260. The RBNZ appears to have made peace with the fact that kiwi will remain elevated as New Zealand continues to enjoy the highest yield in the industrialized world and one of the better economic growth profiles.

Still, the pair faces formidable resistance at the .7300 level and should it climb higher the rhetoric from RBNZ is sure to grow louder.

Meanwhile, the driving force behind US dollar weakness – US rates – continue to drift lower. In tonight’s trade, the benchmark 10-year bond dropped below the 2.15% mark as it inches ever closer to the 2% level. The slow drift lower in US rates since the Fed presser last week continues to weigh on the buck and if yields do not firm up as the day proceeds USDJPY could test the 110.50 support once again while EURUSD will probe 1.1200.

Although trading has been extremely subdued this week, the downward bias against the buck persists.