U.S. Session Forex Recap – Apr. 30, 2015

  • CA raw materials price index: -0.9% vs. -2.0% expected, 5.9% previous
  • CA industrial price index: 0.3% vs. -0.1% expected, 1.8% previous
  • US Q1 2015 advance GDP: 0.2% vs. 1.0% expected, 2.2% previous
  • US pending home sales: 1.1% vs. 1.0% expected, 3.6% previous
  • US EIA crude inventories: 1.9M vs. 2.1M expected, 5.3M previous
  • Fed shrugs off Q1 economic weakness, fails to comment on rate hike schedule
  • Fonterra cuts milk payout forecasts
  • RBNZ keeps interest rates at 3.50%, threatens rate cut if demand weakens

What a day for forex traders! Thanks to weak U.S. data and the FOMC statement, there was no shortage of trading volatility across the board.

The Greenback was under the spotlight since the start of the session with Uncle Sam printing disappointing advance Q1 2015 GDP and pending home sales reports. As I mentioned in my previous recaps, the string of disappointing reports are adding up and supporting speculations that the Fed might hike later rather than sooner this year.

Luckily for dollar bulls, the FOMC statement provided some support for the Greenback. The Fed recognized a weaker economic growth the first quarter, pointing to weather conditions and loss of momentum in business investment. However, the central bank also believes that the situation is temporary and suggested that there won’t be any changes to its plans to increase its rates some time this year.

The early U.S. session dollar selloff triggered short-covering in some major pairs. EUR/USD, for instance, broke above 1.1150 and hit a high of 1.1188 before closing at 1.1112. GBP/USD also ended the session with a 75-pip gain (+0.49%) to 1.5429 while USD/CHF dropped by a whopping 135 pips (-1.42%) to .9403. Heck, even USD/JPY fell by 68 pips (-0.57%) to 118.61 before it recovered to its 119.03 closing price.

The Aussie, Loonie, and Kiwi weren’t as lucky, as they erased most of their session gains after the FOMC event. It didn’t help the comdolls that gold prices slipped and Canada printed weaker-than-expected raw materials and industrial price indices.

AUD/USD popped up to .8075 before closing at .8020 while USD/CAD recovered from a low of 1.1945 to close at 1.2023 and NZD/USD slipped from a session high of .7745 to .7695.

Let’s see how Asian session forex traders react to yesterday’s moves. The RBNZ has already livened up the trading session with its monetary policy statement. Though the central bank kept its rates at 3.50%, it also hinted at future rate cuts if consumer prices continue to fall. Yikes!

The BOJ is next on the docket with its own statement some time during the Asian session. Market players aren’t expecting any changes this month, but look out for statements hinting of the central bank possibly exiting its QE program.

See also:

London Session Recap

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