U.S. Session Forex Recap – June 3, 2015

  • US personal income: 0.4% vs. 0.3% expected, 0.0% previous
  • US factory orders: -0.4% vs. -0.1% expected, 2.2% growth in March
  • US IBD/TIPP consumer optimism: 48.1 vs. 49.8 expected, 49.7 previous
  • UK BRC shop price index: -1 vs. -1.8 expected, -1.9 previous
  • AU AIG services PMI: 49.0 vs. 49.7 previous
  • US ISM manufacturing PMI: 52.8 vs. 52.0 expected, 51.5 previous
  • AU GDP Q1 2015 GDP expected to grow by 0.7% vs. 0.5% previous
  • Chinese HSBC services PMI on tap

Geronimoooooo!!! Forex bulls partied in the pip streets, as optimism for higher-yielding currencies encouraged profit-taking on long Greenback positions.

The biggest story of the hour is the Troika and Greek government submitting proposals for each other to consider. If you recall, early this week Mario Draghi, Christine Lagarde, Francois Hollande, and Angela Merkel all met in Berlin to discuss how they’ll negotiate with Greece. Yesterday’s news fueled rumors that a deal could be reached before the end of the week.

It also didn’t hurt that the euro zone printed better-than-expected reports yesterday. Upticks in consumer prices means less inflation-related worries for the ECB. Last but definitely not the least is the gap in US-German bond yields. While the 10-year Treasury bond yields shot up by 8%, the German bund yields made a whopping 17% jump yesterday. This, together with the reports above, encouraged short-covering on EUR/USD shorts enough to influence the dollar’s performance across the board.

EUR/USD staged an impressive 161-pip rally (+1.46%) to 1.1192 before settling back down to 1.1145 while EUR/GBP also shot up by 58 pips (+0.80%) to .7302 before closing at .7266. Even EUR/JPY saw a 77-pip rise (+0.56%) to 138.32 while EUR/CHF closed 20 pips higher (+0.19%) than its session open price.

The dollar probably sustained the most collateral damage. Thanks to strong EUR/USD moves, USD/JPY also fell by 57 pips (-0.46%) to 124.11 after hitting a low at 123.76 while GBP/USD, which also traded on strong UK reports printed earlier in the day, shot up by another 109 pips (+0.72%) to 1.5339.

Even the comdolls got their slice of dollar-selling pie. The sudden weakness in the dollar and optimism for Greece boosted demand for higher-yielding assets such as commodities and commodity-related currencies.

This is probably why AUD/USD finished the session with a 74-pip (+0.96%) trek to .7771, NZD/USD rose by 54 pips (+0.76%) to .7177, and USD/CAD bears were able to defend the 1.2500 handle with a 96-pip drop (-0.77%) to 1.2408 after hitting a low of 1.2368.

Comdoll traders have a lot more on their plate in the next couple of hours especially with Australia printing its quarterly GDP numbers at 1:30 am GMT, followed by China’s HSBC services PMI at 1:45 am GMT. A weaker-than-expected GDP reading could inspire a bit of profit-taking among Aussie pairs, while strong numbers could extend the comdoll’s rally against its counterparts.

Watch out for any market-moving news, will ya?

See also:

London Session Recap

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