U.S. Session Forex Recap – Feb 3, 2015

  • US core PCE price index shows no growth, similar to last month
  • US ISM manufacturing PMI: 53.5 vs. 54.5 expected, 55.1 previous
  • US personal income: 0.3% vs. 0.2% growth expected, 0.3% previous
  • US personal spending: -0.5% vs. -0.2% expected, 0.5% previous
  • US construction spending: 0.4% vs. 0.7% expected, -0.2% previous
  • AU building approvals and trade balance reports surprise to the upside
  • RBA statement on tap

U.S. session forex traders were mostly in Chopsville yesterday, with bad weather and Super Bowl hangover possibly affecting trading liquidity.

The biggest mover among Uncle Sam’s reports yesterday was the ISM manufacturing PMI, which fell to a 53.5 reading when analysts saw it at 54.5. It also didn’t help the low-yielding Greenback that oil prices extended its rally to a one-month high on speculations that some traders are closing their bearish bets.

EUR/USD rose by 19 pips (+0.17%) to 1.1335, USD/JPY closed 16 pips lower (-0.14%) to 117.49 after hitting an intraday low at 117.12, and USD/CHF fell by 38 pips (-0.41%) to .9276.

Comdolls like AUD, CAD, and NZD were also on the dollar selloff train. AUD/USD inched 9 pips higher (+0.12%) to .7806 and NZD/USD jumped by 38 pips (+0.52%) to .7309.

The Loonie was the biggest winner among the comdolls though, with USD/CAD dropping by 92 pips (-0.73%) to 1.2576 and CAD/JPY jumping by 55 pips (+0.59%) to 93.42 on a combination of weak U.S. data and rising oil prices.

Will we see more comdoll gains today? A couple of hours ago Australia had printed better-than-expected building approvals and trade balance numbers. The Aussie hasn’t reacted much though, probably because traders are waiting for the RBA statement out at 4:30 am GMT.

Forex traders are on the fence on whether or not the RBA will cut its rates today. While the recent moves of other central banks, low inflationary pressures, and possible weakening Chinese economic growth could push the RBA to cut rates, the recent decline in oil prices and the Aussie’s value is also giving the central bank room to breathe. In any case, keep your eyes glued to the tube during the release. The possibility of either scenario is high, so traders could react violently to either decision.

Good luck!

See also:

London Session Recap

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