U.S. Session Forex Recap – Feb. 26, 2015

  • US new home sales: 481K vs. 470K expected, 482K in December
  • Draghi shows first signs of economic optimism
  • Comdolls gain on higher oil prices, steady dairy prices
  • NZ trade balance: +56 million NZD vs. -158 million NZD expected, -159 million NZD

Risk-taking was the name of the game during the U.S. forex trading session, as investors priced in a weak dollar and a couple of positive reports from other major economies.

Yesterday’s data release saw Uncle Sam’s new home sales data slightly dipping below its numbers in January. And with Yellen mostly repeating her not-so-hawkish statements yesterday, dollar bulls were encouraged to take profits on their long trades.

The anti-dollar sentiment was fueled by good news from other major economies. For one thing, Mario Draghi was surprisingly optimistic in a speech, saying that the ECB is seeing positive effects of its stimulus, and that overall outlook is at its most positive in months.

EUR/USD inched 23 pips higher (+0.20%) to 1.1364 and EUR/JPY rose by 22 pips (+0.22%) to 135.09.

The pound also saw support across the board thanks to some traders going back to pricing in an eventual rate hike from the BOE. If you recall, Mark Carney had not only reported a better-than-expected inflation outlook, but the U.K. had also printed impressive jobs figures earlier this month.

GBP/USD climbed 64 pips (+0.41%) to 1.5533 while GBP/JPY rose 70 pips (+0.38%) to 184.64 and EUR/GBP fell by 15 pips (-0.21%) to .7316.

Will we see more risk-taking today? New Zealand had just released a much better-than-expected trade balance report and Australia is scheduled to print its quarterly private capital expenditure numbers at 12:30 am GMT. Market players are projecting a 1.6% decline after showing a 0.2% growth in the previous quarter.

Also note that it probably won’t take a lot for comdoll bulls to pounce. China’s stronger-than-expected manufacturing PMI report, oil prices recently rising above $50 and Fonterra maintaining dairy prices steady (investors had expected a downgrade) could all lead to comdoll rallies during the Asian forex trading session.

Good luck!

See also:

London Session Recap

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