U.S. Session Recap – February 12, 2014

  • US lifts debt ceiling limit without conditions
  • Yellen: tapering to continue in “measured steps”
  • JOLTS job openings at 3.99M vs. 3.98M expected
  • US wholesale inventories at 0.3% vs. 0.5% expected

What a day for the dollar bulls! Thanks to a back-to-back good news combo from Uncle Sam, the Greenback gained pips against its major counterparts.

Although Yellen’s testimony wasn’t as explosive as traders were expecting, it still generated enough volatility to make day traders happy. In her near 6-hour testimony yesterday the new Fed Chairwoman Janet Yellen communicated that while the recovery in the labor market is “far from complete,” the Fed is willing to continue tapering in “measured steps.”

Another bright spot in the dollar’s trading was the U.S. House of Representative’s decision to suspend the debt ceiling (without conditions!) until March 2015. This marks the first debt ceiling increase since 2009 that has no conditions attached to it. What a coup for the Democrats!

USD/JPY was trading around 102.15 before Yellen’s speech but is now trading above 102.50. Meanwhile, EUR/USD and GBP/USD are down from yesterday’s highs by 50 and 40 pips respectively.

Will the Asian session traders fuel the dollar strength? Reports released a few hours ago revealed disappointing news from Australia’s Westpac consumer sentiment as well as Japan’s core machinery and tertiary activity reports. Let’s see if these events cause risk aversion and extend the dollar rally!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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