U.S. Session Forex Recap – August 26, 2015

  • US FHFA house price index: 0.2% vs. 0.4% expected 0.5% previous
  • US S&P Case-Schiller home prices: 5.0% vs. 5.1% expected, 4.9% previous
  • US new home sales: 0.51M as expected vs. 0.48M previous
  • US consumer confidence: 101.5 vs. 93.4 expected, 91.0 previous
  • NZ trade balance shows 649M NZD deficit vs. 600M NZD deficit expected
  • Japan PPI numbers, Australia’s construction work done on tap

Forex price action was mixed during the U.S. session, thanks to a couple of news reports and a bit of profit-taking. Which currencies gained and which ones lost pips?

The Greenback had a mixed day against its counterparts, as it gained against the pound and the comdolls but lost to the euro and its fellow low-yielding counterparts.

We don’t have far to look for explanations. As I mentioned in my London session recap, the high-yielding currencies saw gains across the board after the PBoC lowered its interest rates and its RRR.

Unfortunately for currency bulls, the bears aren’t keen on giving up the reins just yet. The selloff in high-yielding currencies continued during the U.S. session, especially after some analysts expressed doubts on the impact of the PBoC’s latest moves.

GBP/USD ended the session 96 pips lower (-0.61%) to 1.5692 while AUD/USD dropped by 95 pips (-1.32%) to .7130 and NZD/USD fell by 51 pips (-0.78%) to .6482.

The Greenback wasn’t as lucky against its other counterparts. Though Uncle Sam’s new home sales and consumer confidence numbers printed better-than-expected, market players were more focused on the Fed possibly scrapping its plans to raise its rates in 2015 and postpone them to next year.

This is probably why USD/JPY plunged by 127 pips (-1.06%) to 118.80 while USD/CHF also closed near its session open prices after rising to its .9505 intraday high. Ditto for the closely-watched EUR/USD, which recovered all of its session losses and capped the day at 1.1494.

Low-yielding currencies like the yen and the franc got most of the risk aversion moves with EUR/JPY falling by 156 pips (-1.13%) to 135.54; GBP/CHF declining by 122 pips (-0.82%) to 1.4760; GBP/JPY plunging by 317 pips (1.67%) to 186.41 and AUD/JPY sliding by a whopping 203 pips (-2.34%) to 84.71. Yowza!

Last but not the least is the Loonie, which was hit by a double whammy of global growth concerns and oil prices hitting below $40 for the first time in six and a half years. USD/CAD jumped by 152 pips (+1.15%) to 1.3346; CAD/JPY fell by 198 pips (-2.18%) to 89.04, and EUR/CAD popped up by 165 pips (+1.09%) to 1.5340.

Asian session forex traders don’t have much to look forward to since New Zealand has already printed its trade numbers. The weaker-than-expected reading hasn’t affected the Kiwi pairs much, but watch out for any delayed reaction. Also due over the next couple of hours are Japan’s PPI report and Australia’s construction figures. The reports don’t usually cause sustained impact on their respective currencies, but keep your eyes peeled for any game-changing surprises.

Good luck and good trading!

See also:

London Session Recap

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