U.S. Session Forex Recap – Oct. 19, 2015

  • CA manufacturing sales: -0.2% vs. 0.1% expected, 1.7% previous
  • US capacity utilization: 77.5% vs. 77.3% expected, 77.8% previous
  • US Industrial production: -0.2% as expected, -0.1% previous
  • US preliminary UoM consumer sentiment: 92.1 vs. 89.0 expected, 87.2 previous
  • US JOLTS jobs openings: 5.37M vs. 5.77M expected, 5.67 previous
  • US net long-term TICS flows: $20.4B vs. $24.3B expected, $7.7B previous

Ho-hum. Forex volatility was as exciting as watching water boil, as traders showed limited reaction to last Friday’s reports.

Uncle Sam’s economic data came in mostly better-than-expected last Friday with the preliminary reading of the UoM consumer sentiment report coming in at 91.2 when analysts had been expecting a reading of 89.0.

Unfortunately for the dollar, only a few traders were convinced that last Friday’s data would convince the Fed to raise its interest rates this year. Of course, it didn’t help that reports like industrial production and JOLTS job openings came out weaker-than-expected.

This is probably why movements in the major currencies reflected their individual stories rather than overall risk sentiment. For starters, the euro inched higher against its counterparts, likely on profit-taking from the previous sessions’ losses.

EUR/USD popped up 44 pips higher (+0.39%) to a session high of 1.1391 before closing at 1.1354 while EUR/JPY inched 58 pips (+0.43%) to 135.67. Even EUR/GBP rose by 6 pips (+0.08%) to .7356 after hitting a high of .7369 throughout the session.

Meanwhile, the comdolls took breaks from their intraday downtrends thanks to a lack of catalysts that failed to invite more Aussie, Loonie, and Kiwi bears.

AUD/USD traded just below .7300 to close at .7271 while USD/CAD capped the session almost at its open price (1.2912) after trying to shoot for the 1.2939 handle. Last but not the least is NZD/USD, which inched 16 pips higher (+0.24%) to .6813 after seeing losses for most of the day.

Will we see more comdoll volatility this week? Today’s a pretty busy day for Asian session forex traders with China set to print tier 1 reports at 2:00 am GMT. Market players are expecting the annualized industrial production rate to settle down to 6.0% (from 6.1%) while retail sales is expected to remain at an annualized growth rate of 10.8%. Next up, urban fixed asset investment is expected to grow by 10.8% (from 10.9%). Last but definitely not the least is China’s GDP numbers, which is estimated to have grown by 6.8% this year (vs. 7.0%) previous.

Since China is the world’s second largest economy, traders around the world will look closely at today’s releases. Misses in these scheduled reports could affect risk sentiment for the rest of the day, so make sure you’re also on your toes for possible forex volatility!

See also:

London Session Recap

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