U.S. Session Recap – August 19, 2014

  • CA foreign securities purchases: -1.07 billion USD vs. 14.68 billion USD expected and 21.42 billion USD last month
  • US NAHB housing market index shows a reading of 55 vs. 53 last month

Dollar bulls brought their A-game in yesterday’s US forex trading session, as they pushed the low-yielding currency higher against its counterparts.

With Uncle Sam’s NAHB housing market index hitting a 7-month high at 55 and the Russia-Ukraine conflict not escalating yesterday, it was easy for investors to push US equities and Treasury yields higher yesterday.

This is probably why USD/JPY slowly but surely climbed above 102.50 while USD/CHF jumped by 20 pips to .9064. EUR/USD, which was also plagued by mixed European trade data, slipped by 24 pips to 1.3364.

Not everyone was impressed though. Comdoll pairs like AUD/USD and NZD/USD stayed in tight ranges ahead of the RBA meeting minutes in Australia and a bi-monthly dairy auction in New Zealand. Meanwhile, USD/CAD only inched 6 pips higher to 1.0886 as traders price in a weak foreign securities purchases report and an upward revision to last month’s employment numbers.

Today’s another big day for the comdolls with the RBA printing its monetary policy meeting minutes at 1:30 am GMT. While the central bank made no changes to its policies, market players are expecting Stevens and his gang to talk the jawbone the Aussie lower.

New Zealand is also set to print its quarterly inflation expectations report at 3:00 am GMT. The rate has been lollygagging between 2.3% and 2.4% since Q2 2013, so it might not have much impact on the Kiwi. Instead, analysts are looking forward to the dairy auctions happening in a few hours. Since dairy products makes up about a third of New Zealand’s exports, a significant drop in dairy prices could weigh on the economy.

Good luck and good trading!

See also:

London Session Recap

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