U.S. Session Forex Recap – Oct. 23, 2015

  • CA retail sales: 0.5% vs. 0.1% expected, 0.6% previous
  • CA core retail sales: 0.0% vs. 0.2% expected, 0.1% previous
  • US initial jobless claims: 259K vs. 265K expected, 256K previous
  • US FHFA house price index: 0.3% vs. 0.5% expected, 0.5% previous
  • US existing home sales: 5.55M vs. 5.39M expected, 5.30M previous
  • US CB leading index: -0.2% vs. 0.0% expected, 0.1% previous
  • China’s Caixin manufacturing PMI on tap

Forex volatility came alive yesterday, thanks to a couple of U.S. reports and a few surprises from the ECB. How did the major currencies fare during the session?

One of the biggest headliners during U.S. session trading was Mario Draghi’s speech. While the ECB had printed its monetary policy decision in early London trading, it was hours until we heard of the devil in the details.

For starters, Draghi and his gang are apparently so convinced of the power of stimulus that they’ve discussed several options to step it up including even lower interest rates, extending the size and duration of the QE program, and expanding the types of assets they’re willing to buy. Talk about exploring options!

What even more euro bulls rush to their sell buttons is that some ECB members were willing to act immediately. Apparently, the global economic slowdown and the euro zone’s low inflation and slow structural reforms are too urgent for some policymakers. Thankfully for the euro, Draghi also signalled that the ECB isn’t likely to make any moves until December when the central bank gets its hands on its latest economic forecasts.

EUR/USD plummeted by a whopping 212 pips (-1.87%) to 1.1108 throughout the session while EUR/JPY also saw a 153-pip slide (-1.13%) to 134.06. Even EUR/GBP dropped by 103 pips (-1.41%) to .7216 as EUR/CHF slid by 82 pips (-0.75%) to 1.0809.

The dollar was another headline-maker thanks to a slew of better-than-expected reports from Uncle Sam. Yesterday’s initial jobless claims data put the running four-week average to its lowest since 1973 while the housing data also suggested less worries for the Fed despite the recent slowdown in payrolls.

The dollar popped up among the majors with USD/JPY rising by 91 pips (+0.76%) to 120.69, GBP/USD falling by 76 pips (-0.49%) to 1.5393 and USD/CHF rocketing by 108 pips (+1.12%) to .9730.

Last but not the least is the Loonie, which found support from Canada’s better-than-expected retail sales numbers. A closer look reveals that growth rose for a fourth month in a row, this time thanks to strong sales at new car dealers. Not too shabby for an economy that fell into a mild recession in the first half of the year!

USD/CAD inched 21 pips lower (-0.16%) to 1.3107 while CAD/JPY popped up by 83 pips (+0.91%) to 92.08 and GBP/CAD fell by 130 pips (-0.64%) to 2.0176.

Will today’s Asian session forex traders pick up on yesterday’s trends? China’s Caixin manufacturing PMI will be out at 1:45 am GMT and market players are waiting to see if this month’s numbers will exceed last month’s 47.2 reading. Significant hits or misses could cause volatility in the next couple of hours, so make sure you stick around and watch your comdoll trades closely!

See also:

London Session Recap

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