U.S. Session Forex Recap – July 13, 2015

  • CA employment change: -6.4K vs. -10K expected, +58.9K previous
  • CA unemployment rate remains at 6.8% vs. uptick to 6.9% expected
  • US initial jobless claims: 297K vs. 275K expected, 282K previous
  • Yellen: Fed may raise rates “at some point later this year”
  • Possibility of Greece’s “time-out” from Euro Zone on the table after this weekend’s meetings
  • China’s trade balance numbers on tap

Dollar domination was the name of the game during the U.S. session, as forex traders priced in Yellen’s hawkish statements and potential uncertainty over the weekend.

The dollar started the trading session on strong footing as traders who bought high-yielding currencies started unwinding their positions ahead of the weekend. If you recall, risk appetite had dictated price action earlier in the day after Greece submitted proposals to consider over the weekend’s EU meetings. As it turned out, optimism expired before the weekend meetings actually started.

The Greenback gained across the board with EUR/USD dropping by 43 pips (-0.38%) to 1.1143, USD/JPY popping up by 51 pips (+0.42%) to 122.83, and USD/CHF inching 47 pips higher (+0.50%) to .9403.

The comdolls also gave up pips against the dollar despite another good day for China’s equities market and upticks in commodity prices. AUD/USD fell by 23 pips (-0.31%) to .7445 and NZD/USD slid by 28 pips (-0.42%) to .6723.

Last but not the least is the Loonie, which barely held on to its gains after a stronger-than-expected unemployment report. Data released last Friday revealed that a net of 6,400 workers had lost jobs in June, lower than the 10,000 figure that market players had been expecting.

A closer look tells us that the losses were mostly from the 71,200 part-time jobs lost, which was offset by a strong 64,800 uptick in full-time employment. Meanwhile, the unemployment rate remained at 6.8% instead of rising to 6.9% as analysts had expected.

The Loonie managed to gain a couple of pips across the board with USD/CAD slipping by 25 pips (-0.20% ) to 1.2680, CAD/JPY rising by 61 pips (+0.63%) to 96.88, and EUR/CAD dropping by 82 pips (-0.58%) to 1.4130.

Were forex traders right to take off risk ahead of the weekend? All early signs point to a big YES. Not only has this weekend’s EU meetings failed to deliver a deal with Greece, but word around the hood is that more than a couple of Finance Ministers want Greece out of the euro zone starting with a “time out” from the region. Yeouch!

While we wait for more releases from the meetings though, you might want to focus on China’s trade numbers coming out some time in the Asian session.

Forex traders are expecting imports to climb by an annualized rate of 1.0%, up from last month’s 2.5% decline, while exports are expected to drop by 15.5% after last month’s 17.6% downtick. The figures are expected to drag China’s trade balance down to 56.7B USD, down from last month’s 59.59B USD trade surplus.

Concerns over China’s growth could affect today’s Asian market trading, so make sure your eyes are glued to the tube for any significant hits or misses on the tier 1 release!

See also:

London Session Recap

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