U.S. Session Recap – August 18, 2014

  • CA manufacturing sales: 0.6% vs. 0.4% expected and 1.7% previous
  • CA adjusts net employment numbers from 200 to 41,700 in July
  • US PPI: 0.1% as expected vs. 0.4% last month
  • US NY mfg index: 14.7 vs. 20 expected and 25.6 previous
  • US TIC long-term purchases clocks in at -18.7 billion USD vs. +18.6 billion USD last month
  • US industrial production up by 0.4% vs. 0.3% expected and 0.4% previous
  • UUS preliminary UoM consumer sentiment down to 79.2 vs. 82.5 expected and 81.8 previous
  • Risk sentiment takes a hit at developments on Russia/Ukraine conflict

Volatility was tight for most major currency pairs although a couple of news reports made the Loonie and the yen more interesting for market players.

Risk appetite took hits in Friday’s trading after Ukraine reported that it had destroyed a column of Russian armored vehicles, controlled by pro-Moscow rebels, which had rolled over to its territory.

Not surprisingly, the prospect of more conflict in Ukraine sent the low-yielding currencies higher across the board. The Greenback was an exception thanks to a tumble in US equities and the US 10-year Treasury yields dropping below 2.4%.

While EUR/USD and GBP/USD mostly stayed in their tight intraday ranges, USD/JPY fell to an intraday low of 102.14 before capping the day at 102.33. USD/CHF also slipped by 19 pips to .9027 as EUR/CHF dipped by 17 pips to 1.2094. The low-yielding yen’s gains were more pronounced with GBP/JPY dropping by 35 pips to 170.85, EUR/JPY closing 25 pips lower at 137.10, and AUD/JPY falling by 21 pips to 95.43.

The Loonie also provided intraday volatility for the bulls and bears. You see, Canada’s latest employment numbers were upwardly revised to show that there were not 200, but a net of 41,700 workers had found jobs in July. A processing error was said to have caused the discrepancy.

USD/CAD had dropped by 33 pips before risk aversion pushed it back up to its 1.0890 closing price. Even CAD/JPY had spiked to an intraday high of 94.52 before closing at 93.97.

We don’t have any major news report scheduled during the Asian session, so you may want to pay close attention to any news on the Russia-Ukraine conflict. Don’t underestimate the impact of risk sentiment on intraday movements!

See also:

London Session Recap

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