U.S. Session Recap – May 1, 2014

  • Spanish GDP expands by its fastest rate in six years
  • US ADP report adds 220K new private sector jobs vs. 210K expected and 209K previous
  • US advance quarterly GDP grows by 0.1% in Q1 2014 (vs. +1.2% expected and +2.6% previous)
  • US Chicago PMI at 63.0 vs. 57.0 expected and 55.9 previous
  • CA GDP up by 0.2% in February vs. 0.5% growth in January
  • IMF approves $17B Ukraine loan
  • Fed tapers by another $10B, says economy has “picked up”
  • China on Labor Day holiday

What a day for the major currencies! Tier 1 reports during the U.S session fanned the volatility flame among forex traders as they priced in report hits and misses.

The U.S. GDP report was the star of the show after it clocked in a 0.1% growth for Q1 2014, its lowest since the end of 2012 while Q4 2013’s growth was revised down from 3.2% to 2.6%. Analysts had already made allowances for the third coldest winter in US history and expected a 1.2% growth.

Not surprisingly, the Greenback weakened across the board. EUR/USD, already strong from the euro zone’s inflation report, popped up by another 30 pips to its intraweek highs. GBP/USD also broke above its 1.6800 resistance and even briefly touched 1.6900 while USD/JPY’s tight range was disrupted by a 60-pip drop.

Not even strong ADP and Chicago PMI reports were able to convince the dollar bulls to step up. They also didn’t bite when the Fed tapered its asset purchases by another 10 billion USD to 45 billion USD and said that the economy has picked up after the winter slowdown with the labor market “showing further improvement” and consumer spending “rising more quickly.”

Will the dollar get some lovin’ today? The Chinese markets is out on Labor Day holiday today but China will release its official manufacturing PMI numbers at 1:00 am GMT. Market players are looking for an increase from 50.3 to 50.5. Watch out for a weak reading as it could reverse some of the dollar’s losses especially against the comdolls.

Good luck and good trading!

See also:

London Session Recap

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