U.S. Session Forex Recap – Feb. 13, 2015

  • US initial jobless claims: 304K vs. 287K expected, 279K previous
  • US retail sales: -0.8% vs. -0.4% expected, -0.9% previous
  • US core retail sales: -0.9% vs. -0.5% expected, previous reading revised from -1.0% to -0.9%
  • US business inventories up by 0.1% vs 0.2% uptick expected and previous
  • CA new house price index up by 0.1% as expected, same as in November
  • ECB extends Greece’s ELA by 5 billion EUR
  • Oil prices erase some losses, U.S. equities show significant gains

The dollar was triple roundhouse-kicked by its counterparts yesterday, as forex traders priced in weak U.S. data and a bit of risk appetite.

The anti-dollar theme started in early London trading after the BOE’s quarterly inflation report didn’t sound as dovish as markets had expected. It also helped risk appetite that Ukraine and Russian-backed rebels were able to agree on a ceasefire.

Dollar bears gained momentum in the U.S. session when Uncle Sam started printing weak reports. The initial jobless claims, business inventories, and closely-watched all fell below market expectations, which made it easy on the dollar bulls to take profits.

USD/JPY got the most attention with its 93-pip drop (-0.77%) to 118.89 and GBP/USD also jumped by another 34 pips (+0.22%) to 1.5403.

The euro also had no trouble picking up the investors’ attention, especially after the ECB announced that it would extend Greece’s Emergency Lending Assistance (ELA) program by 5 billion EUR to 65 billion EUR. More meetings between Greek and euro zone officials were also scheduled next week, which suggested that they’re committed to finding a solution to Greece’s debt problem.

EUR/USD popped up by 78 pips (+0.69%) to 1.1411, EUR/GBP inched 35 pips higher (+0.48%) to .7408, and EUR/CHF rose by 60 pips (+0.57%) to 1.0617.

Risk-taking also extended to the comdolls. AUD/USD, which should have been weighed by Australia’s weak jobs data, rose by 55 pips (+0.72%) to .7741 throughout the session while NZD/USD also jumped by 53 pips (+0.72%) to .7434. The Loonie, which was further boosted by a rebound in oil prices, fell by 61 pips (-0.49%) to 1.2490.

Can the high-yielding currencies sustain their gains until the end of the week? Asian session forex traders don’t have much on their plate over the next couple of hours, so look for possible extensions or pullbacks from yesterday’s moves.

Good luck!

See also:

London Session Recap

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