Forexlive Americas FX news wrap: US dollar firms further and risk rebounds

• New York Fed: 1 year inflation expectations unchanged at 3.0%.3-year up to 2.5% from 2.3%
• US wholesale sales +1.1% vs +0.2% expected
• US August employment trends 109.04 vs 109.61 prior
• Citigroup CFO Mason: Feels good about consumer and corporate balance sheets
• Atlanta Fed GDPNow growth estimate for Q3 comes in at 2.5%
• Mark Carney will head Liberal advisory task force
• US July consumer credit outstanding +25.45B vs +2.0B expected

Markets:

• Gold up $8 to $2504
• US 10-year yields down 0.8 bps to 3.70%
• WTI crude oil up 95-cents to $68.62
• S&P 500 up 1.2%
• USD leads, NZD lags

Friday’s US dollar strength continued onto Monday despite a much better risk mood. It’s not often you see NZD at the bottom of the FX pile on a day when the S&P 500 rises more than 1%. That speaks to a market that’s sorting out cross currents.

Economic data was a non-factor and the Fed is in the blackout so the only thing to do was consider Fed possibilities and prepare for the US Presidential debate Tuesday and CPI on Wednesday. Bonds sold off early but recovered strongly as the day wore on despite some supply coming this week in 3s, 10s and 30s.

Cable was soft as it broke last week’s lows and fell to 1.3069 and is on track to close near the worst levels. The euro held last week’s lows but was pressured lower of the second day in a broad USD rally.

USD/JPY has made a standing at the August spike lows, bouncing off 142.00 for the second day in a sign that the market might be waiting for the FOMC or some other nudge to break the range.

Overall, there were some decent moves today despite the lack of data or news in a sign of a market that’s struggling to find direction.

This article was written by Adam Button at www.forexlive.com.