U.S. Session Forex Recap – August 5, 2015

  • US factory orders: 1.8% a as expected vs. -1.1% previous
  • US IBD consumer optimism: 46.9 vs. 47.6 expected, 48.1 previous
  • US Fed’s Lockhart calls for a September rate hike
  • NZ Fonterra dairy prices: -9.7% vs. -10.7% previous
  • NZ employment reports show weaker readings
  • AU AIG services index, Caixin’s services PMI on tap

Score another one for the dollar! Thanks to positive reports and a hawkish statement, forex bulls once again pushed the Greenback higher across the board.

The dollar started the U.S. trading session on the right side of the charts when Uncle Sam printed a better-than-expected factory orders report. Strong demand for aircraft in June boosted the numbers for transportation equipment and other goods, which is good for the manufacturing sector. If you recall, factory activity had been weighed down by strong dollar and falling oil prices.

The disappointing IBD consumer optimism report might have weighed on the dollar if not for some news on Fed’s Lockhart. According to a Wall Street Journal article, Atlanta’s Fed head said that it would “take a significant deterioration” in data to talk him out of a September rate hike. That’s +1 on the sooner-than-later interest rate hike team!

EUR/USD fell by 81 pips (-0.74%) to 1.0889 while USD/JPY popped up by 35 pips (+0.28%) to 124.30. Heck, even USD/CHF rocketed by 88 pips (+0.91%) throughout the session!

The dollar’s strength extended to the comdolls, which isn’t surprising given the rebound in commodity prices. Gold’s most actively traded contract, for December delivery, rose by 0.1% to $1,090.70 while Brent and WTI crude oil prices also showed some gains.

One possible explanation for the comdolls’ gains is profit-taking from the previous trading sessions. As I mentioned in my earlier recaps, the comdolls bagged some pips on the back of the RBA’s less-than-dovish policy announcements.

AUD/USD ended the session 16 pips lower (-0.22%) than its open price while NZD/CAD also slipped by 68 pips (-1.03%) on another weak dairy auction. Last but not the least, USD/CAD rocketed by another 55 pips (+0.42%) to 1.3181.

Asian session forex traders have a couple more comdoll-related reports to price in with New Zealand just printing weaker-than-expected employment numbers. On top of that, China is set to print a services PMI report at 1:45 am GMT. Market players are expecting a 52.2 reading, up from last month’s 51.8 figure, but keep an eye out in case we see significant surprises that might affect risk-taking.

Good luck and good trading!

See also:

London Session Recap

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