U.S. Session Forex Recap – July 2, 2015

  • US ADP report: 237K vs. 218K expected, 203K previous
  • US Markit manufacturing PMI: 53.6 vs. 53.4 expected and previous
  • US construction spending: 0.8% vs. 0.4% expected, 2.1% previous
  • US ISM manufacturing PMI: 53.5 vs. 53.2 expected, 52.8 previous
  • Moody’s downgrades Greece’s credit rating from Caa2 to Caa3
  • EU’s Dijsselbloem: “No negotiations until after the referendum.”
  • AU trade numbers on tap

The Greenback was king of pips in yesterday’s U.S. forex trading session, as investors priced in good U.S. data and a bit of risk aversion in the markets.

The dollar already had its momentum during the London session, but the bulls hustled their muscles when the ADP and ISM manufacturing reports came out. The former printed at its fastest pace in six months, while the latter also gave stronger numbers that what market players had been expecting.

With consumer confidence on the rise and Uncle Sam not showing any major reports that support otherwise, these reports are fuelling speculations that the Fed might raise its raise at least once before the end of the year.

It might have also helped the dollar bulls that reports from the other major economies weren’t as optimistic. Rumors of Tsipras possibly agreeing to most of the creditors’ demands took a hit when he urged Greeks to vote “NO” in this Sunday’s referendum, which then prompted EU’s Dijsselbloem to announce that there would be no negotiations until after the weekend.

EUR/USD took a hit on the news, losing 49 pips (-0.44%) to 1.1054 throughout the session. EUR/JPY didn’t have any luck either with its 38-pip slide (-0.28%) to 136.12 while EUR/GBP also slipped by 17 pips (-0.24%) to .7076. GBP/USD also lost 35 pips (-0.22%) throughout the session, thanks to weaker-than-expected U.K. manufacturing PMI data during the London session and a bit of risk aversion in the euro zone.

Aussie, Kiwi, and Loonie bears were also partying in the streets, thanks to currency-specific events weighing on the high-yielding comdolls. For starters, lower gold prices added to the weight of weak Australian PMI yesterday, and dragged AUD/USD down 33 pips (-0.43%) to .7650.

NZD/USD also fell to fresh 4 ½-year lows at .6744 after dairy prices clocked in its EIGHT consecutive decline and hit a six-year low. Last but not the least is the Loonie, which fell by 66 pips (-0.53%) to 1.2584 against the dollar an slipped by 36 pips (-0.37%) to 97.86 against the yen on a 4% decline in oil prices on top of the previous day’s monthly GDP miss. Yikes!

Asian session forex traders have Australia’s trade data on their plate today. The report showed a narrower trade deficit in May as imports of capital goods fell while the value of Australia’s raw material exports rose. The Aussie hasn’t shown significant reaction to the news though, so you might want to keep close tabs in case there are delayed reactions. Also, watch out for any news that might affect risk sentiment or might start intraday trends among the major currencies!

See also:

London Session Recap

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