U.S. Session Forex Recap – Oct. 9, 2014

  • FOMC minutes shows limited support for early rate hike, slightly lower growth and inflation estimates
  • CA housing starts up: 197K vs. 198K expected, 196K previous
  • JP core machinery orders up by 4.7% in August vs. 0.5% uptick expected, 3.5% previous growth
  • Australian employment numbers on tap

Geronimooo!!! Dollar bulls lost the battle for pips during the US forex trading session, as the FOMC minutes showed limited support for an early rate hike.

The biggest takeaway from the central bank’s release is that FOMC members are worried about weakening global growth prospects and the strength of the Greenback. After all, both could further weigh on economic activity and the already low inflation.

The Fed also emphasized that their forward guidance is data dependent, and that rate hikes would happen a “considerable time” after the Fed ends its QE this month. Last but not the least, the central bank slightly lowered its growth and inflation forecasts, citing weaker-than-expected consumer spending and faster-than-expected decline in oil prices among its reasons. Basically, the Fed is hinting that a rate hike isn’t happening anytime soon, at least not as soon as markets had been pricing in.

Not surprisingly, EUR/USD shot up to the 1.2750 handle at the news and ended the day 72 pips higher than its session open price. GBP/USD also rose by 101 pips to 1.6169, USD/JPY slipped by 26 pips to 108.15, and USD/CHF dropped by 60 pips to .9517.

Even the comdolls were at the Greenback-selling party. AUD/USD capped the day with a 72-pip gain to .8847 while NZD/USD saw a 105-pip rally to .7904. USD/CAD, which inched higher after Canada’s housing starts release, dropped back down and closed at 1.1105.

Today’s possibly another big day for the comdolls with Australia’s employment numbers on tap during the Asian forex trading session. The report showed that Australia had lost jobs last month, enough to push unemployment rate from 6.0% to 6.1%. The Aussie spiked lower at the news, but seems to be recovering as I write this. We don’t have any other major news on tap until the next trading session, so watch your comdoll trades closely, aight?

See also:

London Session Recap

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