U.S. Session Forex Recap – July 31, 2015

  • US advance GDP: 2.3% vs. 2.5% expected, 0.6% previous
  • US initial jobless claims: 267K vs. 270K expected, 255K previous
  • US goods trade surplus widens to $63.3B from $59.7B in May
  • US core PCE price index: 1.8% vs. 1.6% expected, 1.0% previous
  • UK GfK consumer confidence: 4 vs. 5 expected, 7 previous
  • Japan’s Tokyo and national CPI, unemployment numbers on tap

The dollar’s price action was as mixed as my sock colors, as forex traders bought the dollar against its European currencies but sold it against its low-yielding counterparts. What’s up?

Yesterday we saw a couple of reports from Uncle Sam, which barely deterred dollar bulls from pricing in a possible September rate hike from the Fed. The U.S. economy grew by 2.3% in Q2 2015, which is lower than the 2.5% uptick expected but still better than the upwardly revised 0.8% growth in Q1 2015.

The initial jobless claims report also missed expectations but was offset by the optimism over the personal consumption numbers. Overall, market players didn’t think that yesterday’s set of reports are enough to put a dent on the Fed’s interest rate hike schedule.

This is probably why the dollar bulls helped drag EUR/USD another 22 pips lower (-0.20%) to 1.0934 while GBP/USD also suffered a 26-pip dip (-0.17%) to 1.5607. Then again, the Greenback might have gained against the euro and pound because of weak German data and uncertainty over Greece’s party referendum over the weekend.

Interestingly enough, the dollar wasn’t as lucky against the comdolls despite further losses in gold and oil prices. One possible explanation is profit-taking after the previous sessions’ strong dollar-friendly forex price action. In fact, this could also explain why the Greenback didn’t make headways against its fellow low-yielding currencies.

AUD/USD popped up by 21 pips (+0.29%) to .7293 while USD/CAD levelled off from its 1.3044 intraday high and closed at 1.3010. USD/JPY also lost 27 pips (-0.22%) to 124.11 and USD/CHF slipped by 13 pips (-0.13%) to .9691.

Let’s see if Asian session forex traders show us more direction. Japan is set to print its Tokyo and national CPI numbers which are generally expected to stagnate after showing 0.1% upticks last month. Meanwhile, the unemployment rate is expected to remain at 3.3%.

Australia also has potential bombshells scheduled with the quarterly PPI and monthly private sector credit numbers on tap at 1:30 am GMT. Market players are estimating a 0.2% PPI growth from the previous quarter’s 0.5% uptick while private sector credit is expected to retain its 0.5% growth.

These reports don’t usually cause sustained impacts on their respective currencies, but they could affect risk appetite during the Asian session. Watch out for possible market-moving news, aight?

Good luck and good trading!

See also:

London Session Recap

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