U.S. Session Forex Recap – October 9, 2015

  • FOMC minutes show worries over inflation, global growth
  • US initial jobless claims: 263K vs. 274K expected, 276K previous
  • CA housing starts: 231K vs. 202K expected, 214K previous
  • CA new house price index: 0.3% vs. 0.2% expected, 0.1% previous
  • Carney still open to a rate hike this year
  • AU home loans report on tap

The dollar lost pips against its forex counterparts after the Fed’s meeting minutes turned out to be more dovish than analysts had thought.

The biggest story of the hour was the FOMC’s latest meeting minutes. If you recall, the Fed printed a somewhat surprising decision to keep its rates steady in September instead of raising it as many market players had expected. Yesterday traders were waiting to see just how close the scale tipped towards a rate hike.

The dollar bulls didn’t get the hawkishness they were looking for. Instead, the Fed’s minutes showed the members’ concerns over a low inflation, the impact of a slowdown in global growth, and the possibility of raising the Fed’s rates too early. Yikes!

The majors showed mixed reaction to the Fed’s minutes. EUR/USD only inched 2 pips lower (-0.02%) to 1.1275 while USD/CHF fell by 31 pips (-0.32%) to .9663. Meanwhile, USD/JPY inched 3 pips higher (+0.03%) to 119.90.

The comdolls were more decisive with their direction. The Aussie, Loonie, and Kiwi ALL gained pips on the dollar despite the continued slide in oil prices. Aside from overall dollar weakness, it’s also possible that Loonie traders had reached to better-than-expected housing starts and new house price index reports from Canada.

AUD/USD rocketed by 67 pips (+0.93%) to .7260 while USD/CAD fell by 13 pips (-0.10%) to 1.3017 and NZD/USD zoomed 61 pips higher (+0.92%) to .6672.

Another headline-maker was BOE Governor Mark Carney, who was surprisingly hawkish in his speech. Aside from repeating his confidence on the strength of the U.K. economy, he also maintained his stance that current economic conditions warrant a rate hike some time this year.

His remarks could be one reason why the pound shot up across the board. GBP/USD popped up by 70 pips (+0.46%) to 1.5359 while GBP/JPY also saw an 88-pip move (+0.48%) to 184.16. Even EUR/GBP fell by 34 pips (-0.46%) to .7341.

Will the dollar lose more ground today? Asian session forex traders don’t have much on their plates with only Australia’s home loans report on tap. Since the report doesn’t usually influence the Aussie’s price action for long, then you might want to prepare for other news events that might affect forex price action. Forex Gump has a trading guide for Canada’s jobs numbers if you want to give that a shot!

See also:

London Session Recap

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