U.S. Session Forex Recap – Apr. 23, 2015

  • SNB: “There will be fewer exemptions from negative interest rates”
  • US existing home sales up from 4.89M to 5.19M vs. 5.03M expected
  • US FHFA house price index up from 0.3% to 0.7% vs. 0.5% expected
  • EZ flash consumer sentiment down from -3.7% to -4.6% vs. -2.5% expected
  • NZ visitor arrivals down by 3.6% vs. 6.8% uptick last month
  • China’s HSBC flash manufacturing PMI on tap

Thanks to the SNB, the franc stole the show during the U.S. forex trading session while other currencies showed mixed price action.

The low-yielding currency started the session with a bang after the Swiss National Bank (SNB) announced that it would considerably lessen the institutional accounts exempt from its negative cash deposit rates, saying that it undermines the central bank’s monetary policy.

Recall that in its January meeting the SNB shocked the markets when it slapped negative interest rates on the markets and stopped defending EUR/CHF’s 1.2000 floor. Well, yesterday’s move suggested that its negative rates haven’t been enough to drive investors away from the franc, and that the SNB might soon take additional measures to weaken its currency.

Not surprisingly, the franc fell like a rock against its counterparts. EUR/CHF is up by a whopping 117 pips (+1.14%) to 1.0406, its highest in 2015, while USD/CHF rocketed by 132 pips (1.38%) to .9701.

Similar moves were seen in franc crosses with GBP/CHF popping up by 177 pips (+1.23%), CHF/JPY falling by 136 pips (-1.09%), AUD/CHF rising by 87 pips (+1.17%).

The Greenback’s move was also unanimous across the charts, thanks to better-than-expected U.S. housing data and a bit of risk aversion in the markets. It also helped that 10-year Treasury yields jumped by 0.07% to 1.98%, its highest in six weeks.

EUR/USD gave up 25 pips (-0.23% ) to 1.0727 while USD/JPY jumped by 34 pips (+0.28%) to 119.92. GBP/USD, still on a high from a not-so-dovish MPC meeting minutes, only fell by 23 pips (-0.15%) to 1.5040.

Even the comdolls bowed down to the Greenback with AUD/USD slipping by 15 pips (-0.19%) to .7764, NZD/USD falling by 54 pips (-0.70%) to .7765, and USD/CAD finding support at the 1.2230 area.

Let’s see if the comdoll bulls manage to sneak in some pips today. Asian session forex traders have China’s flash manufacturing PMI to look forward to at 2:45 am GMT. Market players are expecting a reading of 49.6, similar to the previous month’s release. Watch out for significant hits and misses though, as it could affect risk sentiment over the next couple of hours.

Good luck!

See also:

London Session Recap

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