U.S. Session Forex Recap – Oct. 2, 2014

  • U.S. ADP Employment Survey higher: 213K vs. 205 forecast, 202K previous
  • U.S. Manufacturing PMI weaker: 57.5 vs. 57.9 forecast/previous
  • U.S. Construction Spending weaker: -0.8% vs. 0.5% forecast, 1.2% previous
  • U.S. ISM Manufacturing weaker: 56.6 vs. 58.5 forecast, 59 previous

Forex price action stayed volatile but choppy during the U.S. trading session thanks to mixed tier one data from the U.S., as well as risk aversion flows on geopolitical fears.

First we saw a positive read from the ADP Employment number, but the initial reaction for the Greenback was unexpectedly negative, and remained so as weaker construction and manufacturing data was released. Fortunately for dollar bulls, the sell off was mild and mostly a slow grind lower for the session:

EUR/USD rose by 21 pips to close at 1.2615, GBP/USD moved 22 pips lower to close around 1.6178, and after a choppy session, USD/CHF slipped by only 4 pips to .9565.

The big mover during the U.S. trading session was the Japanese yen, finding strength on risk aversion flows as the U.S. equities market sold off, not only on the weak construction and global manufacturing numbers, but possibly also on ongoing pro-democracy protests in Hong Kong and after the first diagnosis of Ebola in the U.S. was announced. Typical with most risk aversion environments, the yen was up on the session as forex traders seeked safe haven assets.

USD/JPY fell from 109.90 during European trade to 108.90, the current weak lows. EUR/JPY fell from a Wednesday high around 138.80 to close down at 137.40, and GBP/JPY also fell on the session to close at 176.18, or about -1.08% since making highs around 178.00

Today’s Asian forex trading session looks promising once again with comdoll data to keep the volatility party going!  We already got the New Zealand ANZ Commodity Price number at 1:00 am GMT, coming in better-than-previous at -1.3% vs. -3.3%. Forex traders must be focusing on the net negative read because the reaction so far has been a negative for the Kiwi, but it’s still early for Asia trade.

And later at 2:30 am GMT, we’ll get mid-tier Australian data in the form of building approvals and trade balance data. The building approvals number is forecasted to come in below previous at 1% change vs. 2.5% previous, which is generally in trend with the weak data we’ve seen all year. The trade balance number is forecasted to come in at -800M AUD vs. -1.36B AUD, which despite it’s negative read, is inline with the trend of steady improvement over the course of 2014. It could get interesting for the Aussie!

Good luck!

See also:

London Session Recap

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