U.S. Session Recap – Sept. 26, 2014

  • US initial jobless claims 293K vs. 296K expected, 281K previous
  • US durable goods orders down by 18.2% vs. 18.0% downtick expected, 22.5% uptick last month
  • US core durable goods up by 0.7% in August, better than 0.6% expected and 0.5% decline in July

Forex price action was a mixed bag of beans during the US trading session, as investors priced in a bit of risk aversion.

Slightly better-than-expected readings on Uncle Sam’s core durable goods orders and initial jobless claims didn’t do the dollar any favors. Unfortunately for Greenback bulls, a downturn in US equities inspired some investors to cover their losses by taking profits on their long dollar trades.

EUR/USD inched 27 pips higher to 1.2746 while GBP/USD found support at the 1.6280 area and capped the day at 1.6315. USD/JPY also took a 56-pip tumble to 108.69 while USD/CHF fell by 25 pips to .9470.

Another big story of the session is the possibility of Russia seizing foreign assets in response to Western sanctions over the Ukraine crisis. A draft was submitted to Russian courts, which, if translated to law, would allow the state to not only seize foreign assets, but also compensate individuals whose assets were seized in foreign jurisdictions. The move came at the heels of Italy seizing $40 million worth of assets from Arkady Rotenberg, an ally of Putin, early this week.

The news, together with Iraq’s Prime Minister warning of an ISIS plot to attack subway systems in Paris and the US, inspired risk aversion in the markets.

This is probably why the low-yielding yen strengthened across the board. EUR/JPY saw a 42-pip dip to 138.53, GBP/JPY fell by 60 pips to 177.32, and AUD/JPY dropped by 84 pips to 95.47.

Will we see more risk aversion today? Japan has just released its slightly worse-than-expected national inflation numbers and so far the yen is taking small hits across the board. Let’s see if the move extends until the end of the Asian forex trading session, or if it will inspire yen bulls to step up their game.

Good luck and good trading!

See also:

London Session Recap

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