U.S. Session Forex Recap – June 1, 2015

  • CA monthly GDP: -0.2% vs. 0.2% expected, -0.1% previous
  • CA annualized GDP: -0.6% vs. 0.3% expected, 2.2% previous
  • US preliminary GDP (q/q): -0.7% vs. -0.9% expected, 0.2% previous
  • US core PCE price index: 0.8% vs. 0.9% expected and previous
  • US Chicago PMI: 46.2 vs. 53.0 expected, 52.3 previous
  • US UoM consumer sentiment: 90.7 vs. 89.5 expected, 88.6 previous
  • Gold up by 0.14%, WTI crude up by 4.42%
  • New Zealand on Queen’s Birthday holiday
  • AU AIG manufacturing PMI, MI inflation gauge, on tap at 12:30 am GMT
  • Chinese manufacturing PMI out at 1:00 am GMT, HSBC manufacturing data at 1:30 am GMT
  • AU building approvals expected to decline by 1.5%

Forex traders ended the day and month of May with a sigh rather than a bang, as volatility remained muted despite the release of a few economic reports.

Uncle Sam’s GDP revision got some attention when it printed a 0.7% decline after rising by 0.2% in its initial reading. Its impact on the dollar is probably muted by better-than-expected reads on the University of Michigan consumer sentiment report and not-so-big misses on the core PCE price index and Chicago PMI reports. Of course, it’s also possible that dollar bulls and bears have already priced in their biases after hearing from several Fed officials over the past couple of days.

EUR/USD remained in a tight range just below 1.1000 while GBP/USD, which took a hit during the London session, inched 28 pips higher (+0.18%) to 1.5286. USD/JPY was another pair of note, as it rose by 25 pips (+0.20%) to close above the closely-watched 124.00 handle.

Comdoll traders had more action as commodity price action factored in. Gold prices inched higher throughout the day but AUD/USD stayed well within its intraday range and closed without any significant gains or losses. NZD/USD, one of the weakest currency pairs in May, lost another 32 pips (-0.45%) to .7094.

The Loonie had a roller coaster ride, thanks to a mix of Canadian and commodities reports. Canada’s monthly GDP contracted by 0.2% when market players had been expecting a 0.2% uptick. Not only that, but the Q1 2015 numbers also showed the first contraction since the 2009 recession as falling oil prices stunted business investment.

Luckily for currency bulls, oil prices did go up during the day and encouraged some Loonie buying. USD/CAD popped up to an intraday high of 1.2527 at the GDP release but eventually went back down to finish the session with only a 1-pip gain to 1.2437.

Asian session forex traders have a busy day ahead of them with tons of Australian and Chinese data on tap. Australia already has the ball rolling with its inflation gauge and building approvals report and China has also just printed its manufacturing numbers. The reports are showing mixed results and so far hasn’t shown significant impact on the Asian currencies, but watch out for any buildup in volatility in case traders are waiting until all reports are out to price in their biases.

Good luck!

See also:

London Session Recap

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