U.S. Session Forex Recap – Jan. 8, 2015

  • US ADP report up to 241K vs. 225K expected, 227K previous
  • US trade deficit drops to 39B USD vs. 42B USD deficit expected, 42.2B USD deficit previous
  • CA trade balance shows 0.64B CAD deficit vs. 0.20B CAD deficit expected, 0.33B CAD deficit previous
  • CA IVEY PMI up to 55.4 vs. 53.0 expected, 56.9 reading last month
  • Fed meeting minutes show members saw a “rate rise unlikely before April”

Not this time! Just when we thought the Greenback was going to have another good forex trading session, the Fed meeting minutes provided high-yielding currencies opportunities to recoup some of their losses.

The dollar started the U.S. forex trading session on a strong note especially after the ADP report surprised to the upside. Not only did it print higher than markets had expected, but last month’s data was also revised higher from 119K to 227K. This is good news to traders who are looking for clues on this Friday’s NFP figure. Uncle Sam’s trade balance data also provided fuel for the bulls when trade deficit fell to an 11-month low thanks to dropping oil prices reducing the cost of imports.

But the good times didn’t last long for dollar bulls! The low-yielding currency started weakening against its high-yielding counterparts around the London session close and gave up even more pips when the Fed’s meeting minutes was released. While the central bank members don’t see much threat over the declining oil prices and global growth concerns, they also don’t see an interest rate hike, at least before April.

EUR/USD popped from a session low of 1.1802 to close at 1.1833 while GBP/USD rose from a session low of 1.5056 to 1.5108 and USD/CHF slipped from an intraday high of 1.0176 to 1.0149. Even the comdolls gained pips on the Greenback with AUD/USD ending the session 38 pips higher than its open price at .8071 and NZD/USD popping up from an intraday low of .7714 to a .7779 close.

The Loonie also saw some weakness against its counterparts after Canada’s trade data reflected a 3.5% drop in exports on falling oil prices. This caused the Great White North’s trade deficit to hit a 2-year high at 0.64 billion CAD. It also didn’t help that the employment component of the closely-watched IVEY PMI weakened and didn’t bode well for the upcoming jobs reports this tomorrow.

Will we see more dollar weakness today? The only report worth noting is Australia’s building approvals report at 1:30 am GMT. Analysts are expecting a 3% drop after showing an 11.4% gain in October, but keep your eyes peeled in case we see any surprises!

Good luck!

See also:

London Session Recap

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