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

  • US ADP report prints at 208K vs. 222K expected, 233K previous
  • US non-manufacturing PMI at 59.3 vs. 57.5 expected, 57.1 previous
  • US Beige Book shows job gains are “widespread” across Fed districts
  • Bank of Canada prints not-so-dovish statement, boosts CAD
  • AU retail sales, trade balance reports on tap

Score another one for dollar bulls! Thanks to upbeat reports from Uncle Sam, the Greenback once again dominated U.S. forex session trading.

The dollar had a rocky start during the U.S. session after the ADP report, which missed market estimates, was leaked a couple of minutes early. Data showed that employers only added 208,000 workers in November, lower than the 222,000 figure that analysts had been waiting for.

Good thing that the ISM non-manufacturing PMI was there to save the day! The report clocked in at 59.3, higher than the expected 57.5 reading and the report’s highest since August. Though the hiring component of the report slowed a bit, the overall picture still paints increasing momentum and growing optimism among service sector companies as well as the construction and public administration sectors.

The cherry on top of the dollar’s sundae was the Beige Book report, which showed “widespread” job gains across Fed districts. This is probably why EUR/USD closed the session 23 pips lower at 1.2310, while USD/JPY popped up by another 48 pips to new yearly highs near 119.81 and USD/CHF rose by 22 pips to .9777.

The only currencies that held their ground against the Greenback were the pound and the Loonie, both of which were supported by good domestic data. The U.K. printed a better-than-expected services PMI report, while the Bank of Canada (BOC) released a not-so-dovish monetary policy statement.

The central bank kept its rates at 1.0% and said that the balance of risks make its current policies appropriate. What caught investor attention though, was that the BOC also mentioned that the impact of weaker oil prices may pose “important downside risk” to inflation, but that the improvement in U.S. growth, a weaker local currency, and increased infrastructure spending are tempering its impact.

USD/CAD showed Loonie strength with its 20-pip slip to 1.1367, while EUR/CAD saw a 53-pip slide to 1.3992 and CAD/JPY shot up by 55 pips to 105.41.

Will Aussie bulls pick up where the Loonie bulls left off? Australia is set to release its trade balance and retail sales numbers at 1:30 am GMT. Market players are expecting retail sales growth to slow down to 0.1% while imports is seen to have surpassed exports by around 1.8 billion AUD. Both reports have the capacity to dictate the Aussie’s intraday moves, so you make sure you’re near the newswires in case we see significant hits or misses!

See also:

London Session Recap

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