U.S. Session Forex Recap – Oct. 7, 2014

  • CA IVEY PMI at 58.6 in September, up from 50.9 in August
  • CA government announces 5.2 billion CAD budget deficit in the last fiscal year, lower than initial estimates
  • NZ NZIER business confidence down to 19 vs. 32 reading in Q2 2014
  • Chinese markets still out on National Holiday
  • BOJ and RBA monetary policy decisions on tap

Dollar-selling was the name of the game during the US forex trading session, as a light event calendar inspired profit-taking among traders.

The lack of U.S. economic reports spurred on dollar bears who had been waiting to trade the Greenback’s overbought conditions. GBP/USD led the pack with an 83-pip jump to 1.6076, while USD/JPY also slipped by 44 pips to 108.82 and USD/CHF fell by 53 pips to .9591.

Euro bulls were also busy during the session, as they shrugged off worse-than-expected reports from the euro zone. EUR/USD shot up by a whopping 77 pips to 1.2644, EUR/JPY rose 29 pips higher to 137.60, and EUR/GBP inched 8 pips higher to .7866.

Even major comdoll pairs got a piece of the dollar selloff pie. AUD/USD shot up by 22 pips to .8760 and NZD/USD enjoyed a 45-pip jump to .7843.

Meanwhile, the Loonie found additional support from a better-than-expected IVEY PMI report and a government release showing a budget deficit of only 5.2 billion CAD in the last fiscal year, lower than its estimated 11 billion CAD figure. This is probably why USD/CAD fell by 80 pips to 1.1130.

Will we see more comdoll action today? The Aussie and the yen are likely to get forex traders’ attention with the RBA monetary policy decision on tap at 3:30 am GMT and the BOJ’s own statement also due some time during the Asian forex trading session.

Market players aren’t expecting policy changes from either central bank, but keep an eye out for hints of future policy decisions. Remember that the BOJ is under pressure to increase its stimulus efforts after recent reports from Japan missed market expectations. Any hint of additional stimulus could further weaken the yen, while a show of confidence could push the low-yielding currency a bit higher.

Good luck and good trading!

See also:

London Session Recap

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