U.S. Session Forex Recap – June 18, 2015

  • CA wholesale sales: 1.9% vs. 0.3% expected, 1.0% previous
  • Fed leaves interest rates unchanged at 0.25%
  • Fed revises 2015 GDP projections from 2.3% to 2.7% to 1.8% to 2.0%
  • Yellen: 15 of 17 officials expect to raise rates before the end of 2015
  • Yellen: current conditions still do not warrant a rate hike
  • NZ Q1 2015 GDP up by 0.2% vs. 0.6% expected, 0.7% previous

Geronimoooooo!!! The dollar tumbled against its major counterparts after the Fed’s statements failed to deliver the hawkishness that forex traders had been expecting.

Remember that dollar traders were looking for Yellen to signal hawkishness and even drop a few hints on the central bank’s tightening schedule. Unfortunately for dollar bulls, Yellen and her gang failed to deliver.

While she said that 15 of 17 officials are seeing a rate hike in 2015, she also reiterated that current economic conditions still don’t warrant a rate hike. In addition, the Fed has downgraded its 2015 economic projections from 2.3% to 2.7% last March to today’s 1.8% to 2.0%. Yikes!

Not surprisingly, the dollar saw some whipsaws and eventually got clobbered across the board. EUR/USD ended the session 73 pips higher (+0.65%) than its open price after spiking to a low of 1.1333 while USD/CHF also dropped by 55 pips (-0.59%) to .9219.

Traders also focused on USD/JPY, which plunged by 106 pips at the report’s release and ended the session 47 pips lower (-0.38%) at 123.40. Meanwhile, GBP/USD, which shot up in early London trading due to strong average earnings numbers, rose by another 106 pips (+0.67%) to 1.5837.

Commodity price action was mixed with gold rising and oil slipping but even the comdolls snuck in a few pips on the dollar. AUD/USD rose by 64 pips (+0.83%) to .7744, NZD/USD ended the session with a 50-pip gain (+0.72%) to .6980, and USD/CAD dropped by 71 pips (-0.58%) to 1.2235.

Will Asian session forex traders extend the dollar’s losses today? New Zealand has already fired the first salvo in terms of volatility with its Q1 2015 GDP release. While New Zealand’s 0.2% growth is nothing to sneeze at, it also didn’t meet market expectations of a 0.6% growth. This is probably why the Kiwi is currently down against its major counterparts.

We don’t have any other major reports on the docket, so make sure you pay closer attention to price action and investor sentiment! More specifically, keep an eye out for possible extensions or retracements from yesterday’s big moves.

Good luck and good trading!

See also:

London Session Recap

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