U.S. Session Forex Recap – August 3, 2015

  • CA monthly GDP: -0.2% vs. 0.0% expected, -0.1% previous
  • US employment cost index: 0.2% vs. 0.6% expected, 0.7% previous
  • US Chicago PMI: 54.7 vs. 50.8 expected, 49.4 previous
  • US UoM final consumer sentiment: 93.1 vs. 94.0 expected, 93.3 previous
  • China’s manufacturing PMI: 50 vs. 50.1 expected, 50.2 previous
  • China’s HSBC manufacturing PMI: 47.8 vs. 48.3 expected, 48.2 previous
  • AU MI inflation gauge, new home sales and ANZ job ads on tap

The dollar ended the week on a strong note, as forex traders priced in strong U.S. data and their end-of-month positions.

It wasn’t always rainbow and unicorns for Greenback traders. In fact, the low-yielding currency started U.S. session forex trading on the wrong side of the charts, as Uncle Sam printed a surprisingly low wage costs.

The report recorded its smallest increase in 33 years as workers earned less in commissions and bonuses in Q2 2015. Not a good sign especially since the Fed has is watching the employment sector like a hawk. It also didn’t help that the final UoM consumer sentiment reading dipped from 94.0 to 93.1. Luckily for the dollar bulls, the end-of-week and end-of-month flows were enough to encourage retracements of some of the early U.S. session moves.

EUR/USD popped up by 149 pips (+1.36%) to 1.1114 before settling back down to 1.0983 while USD/JPY plunged by 41 pips (-0.33%) to 123.93. Even USD/CHF suffered a 53-pip decline (-0.55%) to .9584 before popping back up to .9660.

The Loonie also got some attention after Canada printed its monthly GDP numbers. The report shrank by 0.2% in May, its fifth consecutive monthly decline, when market players had only been expecting a no-growth scenario. The weakness was led by manufacturing, followed by mining and oil and gas extraction. On top of that, oil prices extended their decline and even hit remarkable lows across the board.

Not surprisingly, USD/CAD rocketed by 31 pips (+0.24%) to 1.3080 while CAD/JPY dropped by 55 pips (-0.58%) to 94.75 and EUR/CAD popped up by 59 pips (+0.41%) to 1.4366.

The other comdolls fared a lot better. Despite worries over China’s growth, strong dollar, and weak commodity prices, the Aussie and Kiwi both managed to gain a couple of pips on the Greenback.

AUD/USD went up by 70 pips (+0.97%) to .7309 while NZD/USD also registered a 62-pip gain (+0.95%) to .6600.

Will we see more gains for the comdolls? Asian session forex traders have a couple of Australian reports to price in, starting with the MI inflation gauge scheduled at 11:30 pm GMT along with the AIG manufacturing PMI. Then, at 1:30 am GMT we’ll see the ANZ job ads numbers. These reports don’t usually influence the Aussie’s price action for long, but they could set the tone for risk-taking over the next couple of hours.

Good luck and good trading this week!

See also:

London Session Recap

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