U.S. Session Forex Recap – June 1, 2015

  • US personal income: 0.4% vs. 0.3% expected, 0.0% previous
  • US personal spending: 0.0% vs. 0.2% expected, 0.5% previous
  • US construction spending: 2.2% vs. 0.7% expected, 0.5% previous
  • US core PCE price index: 0.1% vs. 0.2% expected, 0.1% previous
  • US manufacturing PMI: 54.0 vs. 53.8 expected and previous
  • US ISM manufacturing PMI: 52.8 vs. 52.0 expected, 51.5 previous
  • Meeting between Euro Zone leaders over Greece supports EUR
  • AU current account, RBA policy statement on tap

It was another good day to be a dollar bull, as forex traders took Uncle Sam’s reports as excuses to push the low-yielding currency higher.

Investors focused on personal income, construction spending, and the ISM manufacturing PMI reports, all of which came in higher than market players had been expecting. Traders took it as a sign that the Fed would be convinced to hike rates this year and, with no other major reports on the docket, these were enough to push the dollar higher across the board.

GBP/USD popped up to an intraday high of 1.5271 before dropping back down to its 1.5194 closing price, while USD/CHF also saw a dip to .9405 before closing at .9464. USD/JPY probably got the most attention though, since it finally made new 2015 highs with its 71-pip trek to 124.82.

With Greece’s deadline to the IMF fast approaching, the euro also got some attention yesterday. Analysts paid close attention to ECB President Mario Draghi, Germany’s Angela Merkel, France’s Francois Holland, and the IMF’s Christine Lagarde meeting in Brussels to talk about how they would negotiate with Greece. Though aren’t any formal statements printed yet, a meeting signified that the officials are stepping up their game to find a solution to Greece’s debt problem.

The euro was able to recover its early U.S. session losses against the Greenback, pound, and the franc, and even gained 65 pips (+0.48%) to 136.32 against the yen.

Last but definitely not the least are the comdolls, which collectively bowed down to the dollar’s might. Gold and oil prices barely moved yesterday, but AUD/USD saw a 33-pip decline (-0.43%) to .7603, NZD/USD slipped by 34 pips (-0.48%) to .7089, and USD/CAD finally breached 1.2500 with a visit to 1.2563 before settling back down to 1.2534.

Will we see more comdoll selling today? Australia has a lot of potential market movers on the docket, starting with the current account report that showed a 10.7B AUD deficit (vs. 10.8B AUD deficit expected). The Aussie is slightly higher across the board though you might want to wait for the RBA’s monetary policy decision at 4:30 am GMT before you go all in on your Aussie bets.

If you recall, the central bank lowered its interest rate statement from 2.25% to 2.00% last month, citing a list of concerns including China’s economic slowdown and a weak labor market. The Aussie has dropped significantly since then, so market players aren’t expecting any changes from the RBA this month. Still, keep your eyes on the newswires in case Stevens and his gang surprises us with interest rate changes or biased statements!

See also:

London Session Recap

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