U.S. Session Forex Recap – Feb. 19, 2015

  • US PPI: -0.8% vs. -0.4% expected, -0.2% previous
  • US building permits: 1.05M vs. 1.07M expected, 1.06M previous
  • US housing starts: 1.07M as expected, 1.09M previous
  • US industrial production: 0.2% vs. 0.3% expected, -0.3% previous
  • CA wholesale sales: 2.5% vs. 0.3% expected, -0.3% previous
  • ECB extends Greece’s ELA program
  • FOMC meeting minutes less dovish than expected
  • Loonie slips on falling oil prices

Forex price action had been mixed in early U.S. trading session until the Fed printed its meeting minutes. How did the major currencies react?

Early U.S. session trading centered around the euro zone, as word circulated that the ECB had extended Greece’s Emergency Liquidity Assistance (ELA) program by 3.3 billion EUR, lower than Greece’s 5 billion EUR request. The amount is expected to sustain Greece’s creditors for only one more week.

EUR/USD slipped from its London session high and was trading at around 1.1350 while EUR/JPY had also slipped by 69 pips (-0.51%) to 135.11 before the FOMC meeting minutes.

Fortunately for high-yielding currency bulls, investor attention turned to the Greenback. The closely-watched FOMC meeting minutes revealed that Fed members are focusing more on economic risks rather than recent data improvements, and are leaning towards keeping their rates near zero for longer. Duhn duhn duhn duhn.

The dollar took hits across the board with USD/JPY sliding by 67 pips (-0.56%) to 118.63, EUR/USD popping up to the 1.1400 area, and USD/CHF slipping 29 pips lower (-0.31%) than its session highs to .9420. Even U.S. equities slipped at the news but eventually recovered to show mixed results.

Loonie traders also got busy as oil prices plunged on new reports of increasing oil supply. Brent crude oil prices fell by 4% to $60.53 per barrel, while WTI crude closed 2.6% lower to $52.14.

USD/CAD popped up from its 1.2389 session low to close at 1.2418 while CAD/JPY slipped 39 pips (-0.41%) to 95.54.

Will we see more dollar weakness today? China’s markets are still out on a bank holiday, but Japan has just printed its trade balance report and the BOJ is set to release its monthly report at 6:00 am GMT. The report doesn’t usually cause sustained yen moves, so watch risk sentiment more closely for any clues on possible intraday trends.

Good luck!

See also:

London Session Recap

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