U.S. Session Forex Recap – August 27, 2015

  • US durable goods orders: 2.0% vs. -0.4% expected, 4.1% previous
  • US core durable goods orders: 0.6% vs. 0.3% expected, 1.0% previous
  • US July building permits revised from -16.3% to -15.5%
  • US crude oil inventories: -5452K s. +1450K expected
  • Fed’s Dudley: September rate hike less compelling
  • AU capital expenditure on tap

Dollar traders brought their A-game yesterday, as the low-yielding currency made pips against its forex counterparts. Which currencies lost the most pips?

After a relatively calm early London trading, forex traders went back to buying the Greenback at the start of the U.S. session. One possible explanation is the release of the better-than-expected durable goods report.

Market players had been expecting a 0.4% decline but the headline figure came in at 2.0% with June’s figures also revised higher from 3.4%. The only pooper to the bulls’ party was Fed official Dudley saying that a September rate hike is less compelling now as it was a few weeks back.

USD/JPY fell to a session low of 118.92 before finishing at 119.91 while EUR/USD lost 74 pips (-0.65%) to 1.1336. Even USD/CHF popped up by 81 pips (+0.86%) to .9534. GBP/USD, which was still reeling from concerns of a delayed BOE rate hike, fell by 106 pips (-0.68%) to its two-week low of 1.5475.

The comdolls fared a lot better against the dollar than the other currencies. As I mentioned in my London session update, the PBoC’s interest rate cut and RRR increase brought confidence to commodity-related economies, as they export a lot of their goods to China. Heck, traders even shrugged off another dip in gold prices, something that would have weighed on the Aussie and Kiwi a few days ago.

AUD/USD ended the session 24 pips higher (+0.34%) to .7117 after dipping to a session low of .7072. NZD/USD also slipped to .6409 before capping the session with a 63-pip gain (+0.97%) to .6431.

The Loonie was an exception, as the dip in oil prices didn’t spare the oil-related currency. USD/CAD popped up by another 39 pips (+0.29%) to 1.3323 while CAD/JPY ended the day almost unchanged at 90.00.

Will we see more comdoll action today? Only Australia’s quarterly capital expenditure numbers are due for the next couple of hours. The report is expected to print a 2.5% decline after falling by 4.4% in the previous quarter. A significantly weaker reading could affect sentiment for high-yielding currencies until the start of London trading, so make sure you keep your eyes glued to the tube!

See also:

London Session Recap

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