U.S. Session Forex Recap – Dec. 5, 2014

  • US initial jobless claims down to 297K vs. 295K expected, 314K previous
  • CA IVEY PMI up to 56.9 vs. 52.5 expected, 51.2 previous
  • ECB lowers growth and inflation forecasts
  • Draghi drags his feet on introducing QE
  • USD/JPY touches 120.00

Major currencies had a volatile U.S. forex trading session, thanks to Mario Draghi’s speech and mixed dollar trading. Check out what happened to your favorite currency pairs!

With only a few reports on tap, ECB’s Mario Draghi was under the spotlight during the U.S. trading session. For starters, the central bank lowered both its inflation and growth forecasts, citing lower oil prices and lower growth prospects.

The ECB is now expecting a 0.8% growth this year, down from 0.9%, while it downgraded its 2015 growth expectations from 1.6% to 1% and 2016 projections from 1.9% to 1.5%. Yikes!

What really caught investor attention though, was Draghi’s lack of definite plans for a QE. Instead of giving out more details, Draghi pushed back the plan to early 2015, saying that the ECB needs more time to evaluate the impact of its previous policy changes.

The lack of definite plans for a QE turned out to be good for the euro. EUR/USD jumped to a 1.2456 intraday high before finishing at 1.2383, while EUR/JPY clocked in a 73-pip gain to 148.32. Heck, EUR/GBP even registered a 39-pip gain to .7899 after hitting a high at .7922!

USD/JPY also grabbed the headlines after it finally hit the closely-watched 120.00 handle. The pair hit 120.25 before settling back to its 119.79 closing price. Will we see dollar bears use the resistance to drag the dollar back down after the NFP report?

Ah, the NFP report. Before we can trade the employment release though, we still have Australia’s AIG construction PMI and Japan’s leading indicators to look at. The former printed at 45.4, lower than its previous reading of 53.4. The preliminary reading of Japan’s leading indicators is due at 5:00 am GMT and analysts are expecting a 104.1 read after last month’s 105.6 figure. These reports don’t usually cause sustained moves though, so we’ll likely see tight ranges until the NFP release. Best be prepared with your setups and trading plans by then!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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