U.S. Session Recap – February 26, 2014

  • S&P home price index shows 13.4% growth vs. 13.3% estimates
  • US Fed official Tarullo hints at using policy to combat asset bubbles
  • US consumer confidence reading at 78.1 vs. 80.0 expectations
  • US Richmond manufacturing index at -6 vs. +5 expectations
  • EU Commission upgrades euro zone economic outlook

Can you say see-saw trading? The major currencies ended the day still in their tight ranges despite some bursts of volatility around rumors and news reports. The pound traded higher on M&A flows and the possibility of earlier-than-expected interest rate hikes while the euro received support on the back of the EU Commission’s decision to upgrade the region’s 2014 GDP forecasts from 1.1% to 1.2%.

So what could ruin the bulls’ day? Try risk aversion. Disappointments in the U.S. house price index and consumer confidence turned out to be positive for the low-yielding dollar. Fed official Daniel Tarullo also didn’t help risk appetite when he talked about asset bubbles in the economy. Last but not the least, forex traders paid attention to rising gold prices and talks of a Ukraine default.

By the end of the session EUR/USD and GBP/USD were 26 and 50 pips below their US session peaks respectively. Meanwhile, USD/JPY and USD/CHF both stayed in their tighter ranges.

Will we see clearer directions from the currencies today? We don’t have any major news on deck except for Australia’s quarterly construction report (which printed weaker-than-expected). Keep your eyes on news reports about Nikkei and China in case they dictate the Asian currencies’ direction!

See also:

London Session Recap

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