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

  • US goods trade balance: -59.1B USD vs. -62.3B USD previous
  • US core PCE price index remains at 0.1% as expected
  • US personal income remains at 0.4% as expected
  • US personal spending: 0.3% vs. 0.4% expected, 0.3% previous
  • US UoM consumer sentiment: 91.9 vs. 93.0 expected, 92.9 previous
  • CA raw materials price index: -5.9% vs. -4.3% expected, 0.2% previous
  • CA industrial product price index: 0.7% vs. 0.1% expected, 0.5% previous
  • Fed’s Fischer: FOMC hasn’t decided on September rate hike
  • Jackson Hole weekend: back to business for the Fed?

Thanks to hawkish comments from Fed’s Fischer, the dollar was able to sneak in a few pips against its forex counterparts. What the heck did he say anyway?!

With no tier 1 reports on tap, the biggest story of the hour is the interview of Fed Vice Chairman Stanley Fischer on CNBC. While he said that the Fed has yet to make a decision on a possible September rate hike, he also hinted that China’s recent events have limited impact on the FOMC’s decision and that the case for a rate hike is “overwhelming.”

Not surprisingly, the hawkish comments helped settle the feathers of dollar traders who are doubting their September rate hike bets. EUR/USD fell by another 80 pips (-0.71%) throughout the session while USD/JPY popped up by 62 pips (+0.51%) to 121.44 and USD/CHF inched 22 pips higher (+0.23%) to .9623.

Except for the euro, the Greenback wasn’t as lucky against the higher-yielding currencies. One possible reason is the slight recovery of gold and other commodity prices and a slight miss in the revised UoM consumer sentiment report. Then again, those who have sold their high-yielding bets earlier in the week could have also re-entered their positions ahead of the weekend.

GBP/USD, finally pricing in the U.K.’s better-than-expected reports, recovered from its 1.5336 intraday low to close at 1.5402. AUD/USD also capped the session with a 33-pip gain (0.46%) to .7172 while NZD/USD was almost unchanged at .6464.

Last but not the least is the Loonie, which gained 40 pips (+1.23%) on the dollar to 1.3214 on a recovery of oil prices and better-than-expected industrial product price index report.

Will risk appetite prevail in today’s Asian session forex trading? Australia has a couple of reports on tap including its MI inflation gauge at 12:30 am GMT, followed by the HIA new home sales report at 1:00 am GMT and the quarterly company operating profits and private sector credit numbers at 1:30 am GMT. New Zealand also has its ANZ business confidence numbers scheduled at 1:30 am GMT.

These reports don’t usually affect their respective currencies for long, so you might want to focus instead on planning for the big events ahead. Check out our forex calendar for the tier 1 events you should prepare for!

See also:

London Session Recap

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