U.S. Session Forex Recap – Mar. 6, 2015

  • US initial jobless claims: 320K vs. 295K expected, 313K previous
  • US Challenger job cuts: 20.9% vs. 17.6% previous
  • US Q4 2014 non-farm productivity: -2.2% vs. -2.3% expected, -1.8% previous
  • US factory orders: -0.2% vs. 0.2% expected, -3.5% previous
  • CA IVEY PMI: 49.7 vs. 48.5 expected, 45.4 previous
  • ECB keeps rates unchanged, upgrades growth forecasts, and announces stimulus details

What a day for forex traders! Thanks to some news reports, currency price action fired up during the U.S. trading session.

The Greenback started the trading session on a strong note despite disappointing economic data from Uncle Sam. Initial jobless claims and factory orders both fell below market expectations, with the latter clocking in its sixth consecutive decline in January.

GBP/USD struggled just below the 1.5250 area while USD/JPY hit a high 120.39 before closing at 120.15 and USD/CHF rose 77 pips (+0.80%) to .9744.

Around the same time Mario Draghi was making waves in the markets. The euro ticked higher when he started talking about upgraded growth forecasts and optimism in the economy, but soon tanked when he announced lower inflation forecasts and that the ECB would begin its QE next week. Talk about a last-minute heads up!

According to Draghi, the ECB will purchase 60 billion EUR worth of debt a month through September 2016 or until a “sustainable 2% inflation rate” is reached. Unfortunately, it also lowered its 2015 inflation forecasts from 0.3% to 0.0% and expects a 1.5% inflation rate next year and a 1.8% inflation growth in 2017. Looks like it will be a long ride to 2.00%, huh?

EUR/USD dropped 75 pips to an intraday low of 1.0988 before settling back at 1.1028. EUR/JPY also saw a similar move with its 42-pip (-0.32%) trek to 132.51 while EUR/GBP slipped to a low of .7220 before closing with a 15-pip decline (-0.21%) to .7241.

Even the comdolls got swept up in the risk aversion vibes. The Loonie failed to get support from slightly stronger oil prices while Aussie and Kiwi bulls got spooked by speculations of weaker growth in China.

AUD/USD fell to an intraday low of .7754 before settling back up to .7771 while NZD/USD hit a low of .7454 before closing at 7481. Meanwhile, USD/CAD rose by 67 pips (+0.54%) to 1.2506.

Will high-yielding currencies continue to suffer against the dollar? Only Japan’s leading indicators report is scheduled for release during the Asian session, so keep an eye out for possible continuation of yesterday’s moves.

Good luck!

See also:

London Session Recap

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