U.S. Session Forex Recap – Apr. 20, 2015

  • CA inflation: 0.7% vs. 0.6% expected, 0.9% previous
  • CA core inflation: 0.6% vs. 0.3% expected, 0.6% previous
  • CA retail sales: 1.7% vs. 0.5% expected, -1.4% previous
  • CA core retail sales: 2.0% vs. 0.7% expected, -1.5% previous
  • CA foreign securities purchases: 9.47B CAD vs. 6.00B CAD expected, 5.75B CAD previous
  • US inflation: 0.2% vs. 0.3% expected, 0.2% previous
  • US core inflation: 0.2% vs. 0.2% expected, 0.2% previous
  • US preliminary UoM consumer sentiment: 95.9 vs. 94.0 expected, 93.0 previous
  • US CB leading index: 0.2% vs. 0.3% expected, 0.1% previous
  • PBoC cuts RRR for all banks by 1.00% over the weekend

Forex price action was a mixed bag of nuts during the U.S. session, as traders priced in economic reports and a bit of profit-taking.

The dollar bulls gave a half-hearted effort at the start of the session as Uncle Sam mixed economic data. Consumer prices slightly missed analyst estimates, but the preliminary reading of the University of Michigan consumer sentiment report printed higher than market expectations.

It still didn’t stop the dollar bears from attacking though. EUR/USD fell to a session low of 1.0743 before recovering to 1.0817 while USD/JPY popped up to 119.26 before settling down to 118.82. GBP/USD, which saw strength after the U.K.’s labor data release, gave up its gains and fell by 75 pips (-0.50%) to 1.4959.

The Loonie was also under a big spotlight last Friday after Canada printed better-than-expected tier 1 reports. For starters, Canada’s inflation numbers came in slightly higher than market expectations, which supported the BOC’s latest move not to keep its rates steady and not worry too much over consumer prices.

The retail sales report also provided support as its core numbers rose by a whopping 2.0% in February, way higher than the expected 0.7% uptick. Unfortunately for Loonie bulls, investors also had their eyes on oil prices, which saw a bit of profit-taking after reaching 2015 highs over the past couple of days.

USD/CAD dropped to a low of 1.2089 at the release of U.S. and Canadian reports but eventually climbed by 138 pips (+1.14%) to 1.2227 while CAD/JPY jumped to an intraday high of 98.44 before settling with a 27-pip (-0.28%) session loss to 97.17.

Will we see more Greenback weakness this week? Over the weekend the People’s Bank of China (PBoC) cut the required reserve ratio (RRR) for all its banks by 1.00%, its second cut in two months. This could weigh on risk appetite, as it signals that the central bank needs to boost China’s economic activity by allowing more money to circulate in the markets. New Zealand has also released its quarterly inflation numebr

See also:

London Session Recap

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