U.S. Session Forex Recap – Nov. 4, 2014

  • US Markit manufacturing PMI: 55.9 vs. 56.2 expected and previous
  • US ISM manufacturing PMI: 59.0 vs. 56.5 expected, 56.6 previous
  • US construction spending down by 0.4% vs. 0.7% uptick expected, 0.5% decline last month
  • BOC’s Poloz: Raising rates to combat imbalances is a bad idea

To infinity and beyond! Thanks to better-than-expected U.S. data, forex bulls pushed the Greenback higher during the U.S. session.

Currency bulls and bears extended the previous trading sessions’ price action in the early U.S. session trading. As I mentioned in my London session update, the yen continued to weaken over the BOJ’s new set of stimulus, while the comdolls took hits on China’s slightly disappointing manufacturing numbers.

It wasn’t until Uncle Sam printed the ISM manufacturing PMI when volatility fired up even more. The report unexpectedly clocked in a reading of 59.0 in October, higher than the expected 56.5 figure. What’s more, it came at the heels of a not-so-disappointing Markit manufacturing PMI report.

USD/JPY jumped to 114.22 at the news, its highest level since December 2007 while EUR/USD fell down from its 1.2500 intraday resistance.

Forex trading bears also feasted on the comdolls after a slight miss in China’s manufacturing report. AUD/USD fell by another 33 pips to .8687 while NZD/USD slipped by 41 pips to .7716.

The Loonie was also in focus when it got triple roundhouse-kicked by the markets. Aside from China’s weak reports, the comdoll was also weakened by BOC Governor Poloz saying that using rate hikes to solve economic imbalances such as a strong housing market would be a “bad idea.” Saudi Arabia also didn’t help when it deepened its oil price cuts for the U.S. even as it raised its prices for the rest of the world.

USD/CAD gained 72 pips throughout the session while EUR/CAD also saw an 84-pip jump to 1.4188. Heck, even CAD/JPY dipped by 50 pips to 100.19 despite the overall yen weakness!

Today’s another big day for the comdolls with Australia printing its retail sales and trade balance numbers at 12:30 am GMT, followed by the RBA’s monetary policy decision at 3:30 am GMT. Analysts aren’t expecting any changes to the central bank’s policies, but keep an eye out for any statements that hint at the central bank’s response to Australia’s recent weak reports. If we don’t get anything from the RBA, then consider the possibility of Aussie traders pricing in a strong retail sales report but a weak trade data for the rest of the day.

Good luck!

See also:

London Session Recap

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