U.S. Session Forex Recap – May 29, 2015

  • US initial jobless claims: 282K vs. 270K expected, 275K previous
  • US pending home sales: up by 3.4% vs. 0.9% growth expected, 1.2% previous
  • US crude oil inventories: -2.8M vs-1.5M expected, -2.7M previous
  • CA raw material price index: 3.8% s. 1.6% expected, -1.5% previous
  • CA current account: -17.5B vs -18.6B expected, -13.1B previous
  • Japan Finance Minister Taro Aso: Yen’s slide was “rough”
  • Data dump from Japan due today

Not so fast, dollar bulls! The low-yielding currency took a beating against most of its counterparts, as forex traders priced in mixed reports from the U.S.

The initial jobless claims came in slightly higher-than-expected with a 282,000 reading (vs. 270,000 expected) but was saved by a the pending home sales report reaching a its nine-year high. Unfortunately for dollar junkies, there were more traders were interested in taking profits from their long dollar positions.

EUR/USD recovered from its London session slump and jumped by 57 pips (+0.52%) to 1.0942 while GBP/USD, which was weighed earlier by a weak U.K. GDP reading, also inched 31 pips higher (+0.20%) to 1.5307. Heck, even USD/CHF slipped by 57 pips (-0.60%) to .9442!

USD/JPY bears didn’t really get into the spirit of dollar selloff though they did manage to hold the 124.00 barrier after the pair hit an intraday high at 124.46. One possible reason is that traders had paid attention to Japan’s Finance Minister Aso saying that the yen’s recent slide was “rough” and that they’re monitoring forex rates carefully. This is probably why other yen crosses stayed within tight ranges with AUD/JPY even dipping 14 pips lower (-0.15%) to 94.86.

Speaking of the comdolls, the Aussie, Loonie, and Kiwi also managed to sneak a few pips on the Greenback on the back of flat commodity trading and overall dollar weakness. AUD/USD found an intraday low at .7618 and even closed 4 pips higher (+0.05%) than its session open price. NZD/USD, which was weighed earlier by lower milk price forecasts, climbed 11 pips (+0.15%) throughout the session.

Last but definitely not the least is the Loonie, which found mild support despite the release of weak Canadian data. The raw materials price index fell less than market players had expected but the current account deficit widened by 17.47B CAD in Q4 2014 after narrowing in the first three quarters of 2014. Analysts point to lower oil prices, which lessened the value of Canada’s energy products even though overall volume had increased.

USD/CAD found intraday resistance at 1.2538 before it closed at 1.2434 while CAD/JPY also rose by 17 pips (+0.17%) to 99.74. It didn’t even move much against the European currencies with GBP/CAD and EUR/CAD trading on tight ranges throughout the day.

Over the next couple of hours the Asian session forex traders will likely price in a data dump from Japan. The Land of the Rising Sun is set to print its employment, inflation, and industrial production numbers at 12:30 am GMT. Watch out for any significant weaknesses in the reports, as they could inspire the BOJ to change its tune and increase its stimulus program. Also keep your eyes peeled for any news that might affect dollar buying or risk-taking until the London session begins.

Good luck!

See also:

London Session Recap

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