U.S. Session Forex Recap – September 24, 2015

  • CA retail sales: 0.5% vs. 0.7% expected, 0.4% previous
  • CA core retail sales: 0.0% vs. 0.5% expected and previous
  • US flash manufacturing PMI: 53.0 vs. 52.8 expected, 53.0 previous
  • Crude oil inventories: -1.9M vs. -1.0M expected, -2.1M previous
  • Draghi: inflation will take longer-than-expected to rise, ECB still open to do add QE
  • BOE’s Broadbent: wages are on the rise
  • NZ trade balance: -1.04B NZD vs. -0.85B NZD expected, -0.73B NZD previous
  • Japan’s flash manufacturing PMI, all industries data on tap

Forex trading was a mixed bag of nuts, as the dollar gained pips against the low-yielding yen and franc, lost some to the euro and pound, and gained a lot against the comdolls. What’s up with that?!

The Greenback gained a couple more pips against its low-yielding counterparts after Uncle Sam printed a better-than-expected flash manufacturing PMI. The strength in the manufacturing sector added to arguments of a 2015 rate hike from the Fed.

USD/JPY inched another 12 pips (+0.10%) to 120.27 after hitting a high of 120.55 while USD/CHF popped up by 42 pips (+0.43%) to .9796.

European currencies weren’t as consistent with their dollar-related moves. For instance, the euro made pips against the dollar, yen, and the franc even though Mario Draghi had said that it’s going to take longer before we see higher consumer prices in the euro zone. Heck, he even hinted of more QE from the European Central Bank (ECB). Draghi didn’t sound too urgent about pressing the QE button yet, though, which is probably why the common currency saw some gains.

EUR/USD rose by 19 pips (+0.17%) to 1.1182 while EUR/JPY saw a 38-pip rise (+0.28%) to 134.49 and EUR/CHF gained 67 pips (+0.62%) to 1.0955.

The pound was another story as it LOST pips across the board despite the lack of major U.K.-related reports and hawkish central banker statements. In a speech, Bank of England (BOE) Deputy Governor Ben Broadbent said that the lower-skilled economy that prevailed during the U.K.’s economic recovery is beginning to unwind, and that we’re about to see average real wages rise. Investors took his speech as hawkish, since higher wages could lead to higher inflation and eventually tighter monetary policies.

Still, GBP/USD fell by another 54 pips (-0.35%) to 1.5253 while GBP/JPY dropped by 67 pips (-0.36%) to 183.24. Even EUR/GBP popped up by 46 pips (+0.63%) to .7339.

As interesting as the pound’s price action is though, it was the comdolls that grabbed the most headlined during the U.S. session. Aside from taking hits following China’s disappointing manufacturing PMI, the comdolls also had to deal with weaker commodity prices. Gold once again dropped on Fed rate hike prospects while a weaker-than-expected oil inventory report spurred another selloff in the oil markets.

AUD/USD suffered a trip below .7000 with its 68-pip decline (-0.96%) to .6990 while USD/CAD rose by a solid 100 pips (+0.76%) to 1.3346. Meanwhile, NZD/USD weakened in anticipation of a weak trade balance release and capped the session 58 pips (-0.92%) lower than its open price.

See also:

London Session Recap

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