- Dollar rallies as Yellen leaves door open for 2015 rate hike, fades w/equities into North America close.
- U.S. 2-year yield hit highest in a week on Yellen remarks before fading.
- Fed’s Bullard: may not be enough new data to convince Fed to hike in Oct.
- Fed’s George: waiting for perfect conditions to lift rates is not realistic.
- U.S. House Speaker Boehner to resign top job end of October.
- S&P cuts 2015 crude oil price forecasts 2015 WTI USD 45/bbl, 2016 WTI USD 50/bbl.
- U.S. Q2 GDP growth revised up on spending, building (Q2 GDP Final 3.9% vs forecast 3.7).
- US Core PCE Prices Final Q2 1.9%, forecast -1.8%, 1.80%-previous, moves nearer Fed target of 2%.
- US U Mich Sentiment Final Sep 87.2, forecast- 86.7, 91.9-previous, slips vs Aug but beats forecast.
- Brazil Central bank calls extraordinary swap auction to support real, near 4.00 USD/BRL.
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- 05:30 Japan BOJ Governor Haruhiko Kuroda will deliver a speech to business leaders
Currency SummariesEUR/USD is likely to find support at 1.1116 levels and currently trading at 1.1200 levels. The pair has made session high at 1.1213 and hit lows at 1.1170 levels. The U.S. dollar hit its highest in over five weeks against euro on Friday, a day after Federal Reserve Chair Janet Yellen said she expected the central bank to hike rates in 2015, and after U.S. growth data appeared to support such a move. In a speech late Thursday, a week after the Fed delayed a long-anticipated rate hike, Yellen said she and other U.S. central bank policymakers do not expect recent global economic and financial market developments to significantly affect policy. The euro slipped against the dollar after two straight days of gains, but it remained within recent ranges and did not break below a more than two-week low of $1.11050 touched on Sept. 23. To the upside, immediate resistance can be seen at 1.1225. To the downside, immediate support level is located at 1.1770 levels.GBP/USD is supported in the range of 1.5133 levels and currently trading at 1.5185 levels. It reached session high at 1.5209 and dropped to session low at 1.5135 levels. Sterling stumbled to a 3 1/2-month low against the dollar on Friday and was facing its worst week in six months, after Federal Reserve Chair Janet Yellen said she expected to raise U.S. interest rates later this year. The Bank of England is expected to follow the Fed with a rise in interest rates from their current historic lows. But with UK inflation stuck at zero, the BoE is in no hurry, and investors do not expect an increase until the second half of 2016, making the dollar a more attractive currency. Sterling fell as low as $1.5152 on Friday, its weakest since early June, before inching up to $1.5191, still down 0.4 percent on the day. For the week, the pound was down over 2 percent, its biggest fall since early March. Purchasing managers’ index (PMI) surveys released next week will be watched for clues on how the UK economy is performing. . To the upside, immediate resistance can be seen at 1.5185. To the downside, immediate support level is located at 1.5134 levels.USD/JPY is supported around 120.20 levels and currently trading at 120.45 levels. It peaked to hit session high at 121.23 and made session lows at 119.48 levels. US dollar edged higher against Japanese yen on Friday, after top Federal Reserve official Chair Janet Yellen said there is possibility of rate hike by the year-end. The dollar was up 0.37 percent against the yen at 120.55. The dollar hit its highest in over two weeks against the Japanese yen of 121.240 yen on Friday. On the data front, The U.S. economy expanded more than previously estimated in the second quarter on stronger consumer spending and construction, backing the case for an interest rate rise before the end of the year despite data sounding a note of caution for September. The Commerce Department said on Friday gross domestic product rose at a 3.9 percent annual pace in the April-June quarter, up from the 3.7 percent pace reported last month. The data supports the case that the U.S. economy may be gaining enough strength to withstand an increase in benchmark interest rates from record low levels despite growing concerns about the global economy. To the upside, immediate resistance can be seen at 120.70. To the downside, immediate support level is located at 120.20 levels.USD/CAD is supported at 1.3300 levels and is trading at 1.3330 levels. It has made session high at 1.3343 and lows at 1.3294 levels. – The Canadian dollar was little changed on Friday, leaving it near 11-year lows, as investors favored its U.S. counterpart after the head of the Federal Reserve said the U.S. central bank was on track to raise interest rates this year. A healthy upward revision to U.S. economic growth in the second quarter added to the case for a hike in rates in the coming months and increased appetite for the U.S. dollar. The upbeat data followed a speech late on Thursday by Fed Chair Janet Yellen who said the Fed was on track to raise rates this year for the first time in nearly a decade. The Canadian dollar had briefly touched an 11-year low on Thursday before recovering but it was not able to make much headway on Friday. The Canadian dollar ended the North American session at C$1.3316 to the greenback, or 75.10 U.S. cents. To the upside, immediate resistance can be seen at 1.3346. To the downside, immediate support level is located at 1.3302 levels.Equities RecapEuropean shares ended higher on Friday after testing 2015 lows in the previous session, as concern over the global economy eased and a sell-off of car stocks began to slow.UK’s benchmark FTSE 100 closed up by 2.61 percent, the pan-European FTSEurofirst 300 ended the day up by 2.91 percent, Germany’s Dax ended up by 2.97 percent, France’s CAC finished the day up by 3.3 percent.The S&P 500 erased an early Fed-driven rally to close down slightly on Friday, as a selloff in biotechs offset gains in banking shares. Dow Jones closed up by 0.71 percent, S&P 500 ended down by 0.02 percent, Nasdaq finished the day down 0.99 percent.Treasuries RecapU.S. Treasuries prices declined on Friday after Federal Reserve Chair Janet Yellen somewhat revived expectations of an interest rate increase by year-end and data showed the nation’s economy grew more than previously estimated in the second quarter.10-year Treasuries notes were down 12/32 in price for a yield of 2.164 percent, up 4 basis points from late on Thursday. The 30-year bond was down 1 point in price to yield 2.955 percent, up 5 basis points on the day. The two-year yield, which rises with expectations of higher U.S. rates, hit a one-week high of 0.7430 percent before retreating to 0.700 percent, up 2 basis points on the day.Commodities RecapOil prices rose for the second straight day on Friday, supported by a rally on Wall Street and a lower U.S. rig count, although the decline in drilling was the smallest in four weeks and not particularly exciting to traders.Brent, the global benchmark for oil, settled up 43 cents, or 0.9 percent, at $48.60 a barrel. It rose almost $1 at the session high, riding the coattails of the U.S. equities rally, then turned negative for a good part of the day before rebounding. U.S. crude settled up 79 cents, or 1.8 percent, at $45. the week, both Brent and U.S. crude were up about 2 percent.Gold fell from one-month highs on Friday after Federal Reserve Chair Janet Yellen kept the door open to an increase in U.S. interest rates this year, sparking a dollar rally, while palladium was on track for its biggest weekly rise in almost four years.Spot gold was down 0.5 percent at $1,148.6 an ounce at 3:41 p.m. (1941 GMT), having climbed 2.1 percent on Thursday, its biggest one-day rise since January. U.S. gold futures for December delivery settled down 0.7 percent at $1,145.6, on track for their fifth straight quarterly loss.
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