U.S. Session Recap – May 7, 2014

  • US trade balance shows 40.4 billion USD deficit vs. 41.9 billion USD last month
  • CA trade surplus clocks in at 79 million CAD vs. 85 million CAD in March
  • CA IVEY PMI drops to 54.1 vs. 55.2 last month and 54.5 expected
  • NZ employment grows by 0.9% in Q1 2014
  • NZ unemployment rate stays at 6.0% vs. 5.8% expected

What a bloodbath for the Greenback! It seems like the London session traders set the dollar’s intraday trend as the low-yielding currency continued to slide against its major counterparts during the U.S. session.

A weaker-than-expected U.S. trade balance reading had sparked talks of a weak GDP for Q1 2014. This motivated investors (who were still pricing in better-than-expected reports from the euro zone and the U.K.) to continue buying higher-yielding currencies against the dollar.

EUR/USD had broken above the 1.3900 major psychological handle and even traded at 1.3950 before leveling off. GBP/USD’s takeoff was also noted since it had broken a major resistance and even reached a hair’s breadth away from the big 1.7000 figure. Even the comdolls got a piece of the anti-dollar action with AUD/USD gaining 35 pips and USD/CAD slipping by as many as 60 pips throughout the session.

Let’s see if the Asian session traders will keep the dollar-bearish momentum alive. New Zealand had just released its employment data and so far the Kiwi bulls don’t like what they’re seeing. The BOJ is also set to print its monetary policy meeting minutes at 11:50 pm GMT but traders aren’t expecting anything game-changing from the central bank.

Last but not the least, Australia will release its retail sales numbers at 1:30 am GMT. Analysts are looking for a 1.6% growth from last month’s 0.9% uptick but keep an eye out in case we see surprises!

See also:

London Session Recap

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