U.S. Session Forex Recap – Apr. 16, 2015

  • CA manufacturing sales: -1.7 vs. 0.1% expected, -3.0% previous
  • US NY manufacturing PMI: -1.2 vs. 7.2 expected, 6.9 previous
  • US capacity utilization: 78.4% vs. 78.6% expected, 79% previous
  • US industrial production: -0.6% vs. -0.3% expected, 0.1% previous
  • US NAHB housing survey: 56 vs. 55 expected, 52 previous
  • US Beige book report shows activity expansions in most regions
  • US long-term TICS flows: $9.8B vs. $40.0B expected, $-27.4B previous
  • S&P downgrades Greece’s ratings from B- to CCC+ with a negative outlook
  • BOC leaves rates unchanged, downgrades 2015 growth forecasts and boosts Q3 and Q4 2015 inflation estimates
  • Australian jobs numbers on tap

What a day for forex traders! Thanks to economic data and central bank events, there was no shortage of volatility among the major currencies.

The dollar was front and center of yesterday’s U.S. session action. Uncle Sam printed worse-than-expected New York manufacturing PMI, industrial production, and capacity utilization numbers though we also saw upside surprises in the Fed’s Beige Book report. By the end of the day some forex bears were convinced that the Greenback had hit a short-term top.

EUR/USD popped up by 100 pips (+0.95%) to 1.0684 while GBP/USD also saw a 97-pip gain (+0.66%) to 1.4842 and USD/JPY slid by 41 pips (-0.34%) to 119.14.

Mario Draghi was also under the spotlight and managed to boost the common currency across the board. In his press conference, the ECB head honcho was generally upbeat, saying that the economy has gained momentum and that the central bank’s QE program is on track until around 2016.

EUR/GBP inched 20 pips (+0.28%) higher to .7198 while EUR/JPY jumped by 76 pips (+0.60%) to 127.29.

As exciting as the events above were though, the biggest mover was still the Loonie. For starters, the Bank of Canada’s (BOC) monetary policy decision was much less dovish than expected. If you recall, analysts were worried that the BOC was considering a rate cut following heavy losses on oil production, one of Canada’s biggest exports. Instead, Poloz and his gang actually raised inflation forecasts for Q3 and Q4 2015 and raised its growth estimates for 2016. The cherry on top of the Loonie bulls’ sundae was oil prices rising by as much as 5% yesterday. Booyah!

USD/CAD plunged by a whopping 252 pips (-2.01%) to 1.2291 while CAD/JPY rocketed by 161 pips (+1.69%) to 96.93 and GBP/CAD fell by 255 pips (-1.38%) to 1.8241.

Today’s forex action would probably come from Australia’s jobs data released a couple of minutes ago. The report showed that Australia’s jobless rate fell from 6.3% to 6.1% and that a net of 37,700 workers had found jobs in March. Not surprisingly, the Aussie is currently higher across the board.

There won’t be other major reports on tap until the early London session, so keep your eyes on what today’s reports could mean for risk sentiment over the next couple of hours.

Good luck!

See also:

London Session Recap

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