- CA IVEY manufacturing PMI: 55.9 vs. 56.0 expected, 62.3 previous
- US Markit final services PMI: 54.8 vs. 54.9 expected
- US ISM non-manufacturing PMI: 56.0 vs. 56.4 expected, 55.7 previous
- Greece swears in new Finance Minister Euclid Tsakalotos
- Greek banks to remain closed on Tuesday and Wednesday
- ECB keeps ELA in place but adds haircuts on collateral
- NZ NZIER business confidence reading: 5 vs. 23 previous
- RBA interest rate decision due in a few hours
Forex price action was a mixed bag of nuts during the U.S. session, as traders priced in a slew of minor economic reports.
The Loonie was hit by a triple roundhouse kick of lower oil prices, worse-than-expected Canadian data, and uncertainty over the Greek and Chinese markets. Oil prices tumbled by nearly 8% on the day as Chinese market volatility and projections of more crude supply from the U.S. and Iran wreaked havoc on the commodity’s price action.
It also didn’t help that Canada’s IVEY PMI missed expectations with a 55.9 reading, a three-month low, after clocking in its fastest pace in 19 months in its previous read. Last but not the least is uncertainty over developments in Greek and Chinese markets, which weighed on risk appetite.
USD/CAD popped up by 15 pips (+0.12%) to 1.2653, CAD/JPY slipped by 32 pips (-0.33%) to 96.82, and EUR/CAD rose by 68 pips (+0.49%) to 1.3984.
The other comdolls weren’t so lucky either. Thanks to concerns over China and maybe a bit of profit-taking ahead of the RBA’s interest rate decision, AUD/USD ended the session 35 pips lower than its session high, while NZD/USD also slipped by 28 pips (-0.42%) from its intraday high.
The euro’s price action was as mixed as the Greenback’s. In the euro’s case, the swearing in of new Finance Minister Tsakalotos wasn’t all positive for the common currency, as it could mean more time (that Greece doesn’t have) needed for the new FM to get his bearings.
Meanwhile, the dollar had trouble picking direction thanks to a slight miss in the ISM manufacturing PMI and the drop in oil prices making it less appealing for the Fed to raise its interest rates anytime soon.
EUR/USD rose to a high of 1.1091 before settling in at 1.1052 while USD/JPY inched 25 pips higher (+0.20%) to 122.51, USD/CHF slipped by 35 pips (-0.37%) to .9426, and GBP/USD popped up by 49 pips (+0.32%) to 1.5603.
Will we see more volatility from the major currencies today? The RBA is set to fire the first salvo in the Asian session with its interest rate decision at 4:30 am GMT.
While market players aren’t expecting changes from the central bank’s 2.0% interest rate, you might want to look out for signs of dovishness in the accompanying statement. With traders already antsy about the recent moves in commodity prices and China’s markets, it won’t take a lot for the bears to pounce.
Good luck and good trading!
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