U.S. Session Recap – August 6, 2014

  • US ISM services PMI: 58.7 vs. 56.5 expected and 56.0 previous
  • US factory orders up by 1.1% vs. 0.6% uptick expected and 0.6% decline from last month
  • US IBD/TIPP consumer optimism: 44.5 vs. 47.3 expected and 45.6 previous
  • Russia preparing to retaliate against Western sanctions
  • Slump in dairy prices weighs on NZD
  • NZ unemployment rate drops but employment change misses estimates

The dollar bulls brought their A-game during yesterday’s US forex trading session as risk aversion and better-than-expected US data pushed the low-yielding currency higher against its counterparts.

ISM’s services PMI report boosted the dollar in early US session trading as it signals optimism for the Uncle Sam’s workers. Not only that, but factory orders also pointed to strong manufacturing activity with a 1.1% rise in June after falling by as much as 0.6% in May. Of course, it also didn’t hurt that risk aversion took its toll after Putin ordered his government to prepare retaliation for the US and European community’s sanctions against Russia.

EUR/USD hit a new intraday low at 1.3358 before closing 15 pips lower than its session open price while USD/JPY reached a high at 102.94 before sellers pushed it back down to 102.59. The comdoll bears also got some action with AUD/USD slipping by 16 pips to .9305 and USD/CAD popping up by 7 pips to 1.0961. The only resilient major currency was the pound, which was still supported by a strong UK services PMI reading. GBP/USD actually rose by 16 pips to 1.6878.

The Kiwi was one of the biggest losers as dairy prices slumped to its lowest levels since October 2012 following a weak auction. This is bad news for New Zealand, as its economy heavily relies on its dairy exports. NZD/USD fell by 49 pips to .8469 while GBP/NZD jumped by a whopping 134 pips to 1.9930.

Will the Kiwi bulls get any pips back in today’s Asian session trading? New Zealand had just printed its employment numbers and so far they’re not doing the comdoll any favors. Unemployment rate in the region might have dropped from 5.9% to 5.6% but hiring only improved by 0.4% in Q2 2014, which is weaker than the 0.9% uptick from Q1 2014.

Only the UK’s BRC shop price index at 11:01 pm GMT and Japan’s leading indicators at 5:00 am GMT are left for printing for the rest of the trading session, so you might want to watch your yen or Kiwi trades closely for any intraday opportunities.

See also:

London Session Recap

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