U.S. Session Forex Recap – October 2, 2015

  • US initial jobless claims: 277K vs. 271K expected, 267K previous
  • US Challenger job cuts: 93.2% vs. 2.9% previous
  • US final manufacturing PMI: 53.1 vs. 53.0 expected and previous
  • US ISM manufacturing PMI: 50.2 vs. 50.6 expected, 51.1 previous
  • US construction spending: 0.7% vs. 0.5% expected, 0.4% previous
  • CA RBC manufacturing PMI: 48.6 vs. 49.4 previous
  • China’s markets out on another National holiday
  • AU retail sales, Japan’s unemployment rate due today

With only a couple of trading sessions left until the NFP report, it’s not surprising to see forex volatility take hits across the board.

The dollar started the trading session on a strong note after disappointing economic reports in early London trading weighed on risk appetite. Unfortunately for dollar bulls, Uncle Sam also printed its own weak reports.

Initial jobless claims, construction spending, and the final manufacturing PMI all printed better than market players had expected but other closely-watched reports weren’t as bullish. For starters, Challenger Grey and Christmas reported a 93.2% increase in planned job layoffs, up from last month’s 2.9% reading. Meanwhile, the ISM manufacturing PMI clocked in at 50.2 after showing an index reading of 51.1 last month.

The weak U.S. reports made it easy for dollar bulls to take off their positions ahead of the NFP report. This is probably why EUR/USD popped up by 33 pips (+0.30%) to 1.1188 while GBP/USD ended the session with only a 5-pips loss (-0.03%) to 1.5130 after hitting an intraday high of 1.5180. The Greenback was also mixed against its low-yielding counterparts with USD/JPY inching 18 pips higher (+0.15%) to 119.91 while USD/CHF slipped by 12 pips (-0.12%) to .9772.

Even the comdolls were affected by profit-taking and a bit of risk aversion during the session. AUD/USD lost its post-Chinese-report high and fell by 40 pips (-0.57%) to .7028 as NZD/USD also dropped by 40 pips (-0.62%) to .6401.

The Loonie was the best-performing comdoll, thanks to an early uptick in oil prices. The black crack eventually lost most of its gains, but not before the Loonie bulls had time to gain some momentum. USD/CAD ended the session 17 pips (-0.13%) lower to 1.3256 while CAD/JPY rose by 25 pips (+0.28%) to 90.46.

Will Asian session forex traders inspire a bit more volatility ahead of the NFP report? China’s markets are out on another National holiday, but we will be seeing Australia’s retail sales numbers at 1:30 am GMT. The report usually causes significant impact on the Aussie during the Asian session, so prepare to see some reaction to report hits of misses. Of course, with the NFP report only a few hours away, you might also want to keep an eye out for possible profit-taking and/or tight ranges for the rest of the trading session.

See also:

London Session Recap

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