U.S. Session Forex Recap – Nov. 4, 2015

  • U.S. factory orders dropped by 1.0% in Sept
  • U.S. Aug factory orders downgraded to show 2.1% decline vs. -1.7% estimate
  • U.S. total vehicle sales up by 18.2 million in Oct
  • New Zealand GDT price index down by 7.4% in latest auction
  • New Zealand employment down by 0.4% in Q3 vs. +0.4% forecast
  • New Zealand Q2 employment change downgraded from 0.3% to 0.1%
  • Unemployment rate up from 5.9% to 6.0% in New Zealand

I’m seeing red! Data from the U.S. economy came in mostly weaker than expected, yet the lower-yielding Greenback managed to advance against its forex peers. USD/JPY popped back above the 121.00 handle from a low of 120.57 (+0.11%), EUR/USD dipped to a low of 1.0937 (-0.30%), GBP/USD fell close to the 1.5350 level before rebounding above 1.5400, and USD/CHF peaked at .9924.

U.S. factory orders were down 1.0% in September, worse than the projected 0.8% drop, while the previous month’s reading was revised to show a sharper decline of 2.1% from the initially reported 1.7% tumble. Economic optimism took a turn for the worse, according to the IBD/TIPP index, which fell from 47.3 to 45.5 this month instead of improving to the projected 47.5 reading. The only positive piece of data from Uncle Sam was the higher than expected total vehicle sales figure of 18.2 million in October, surpassing expectations of 17.8 million.

New Zealand held its bi-weekly Global Dairy Trade auction in the wee hours of the U.S. session, yielding a 7.4% decline in dairy prices. This follows the previous auction’s 3.1% drop in prices, leading forex junkies to speculate that Fonterra might lower its milk payout forecasts once more and that the dairy industry might be in for another tumble.

It didn’t help that New Zealand’s quarterly employment change report printed dismal results, as hiring fell by 0.4% in Q3 instead of picking up by 0.4%. To top it off, the previous quarter’s reading was downgraded to show a meager 0.1% uptick in employment from the initially reported 0.3% increase. The jobless rate climbed from 5.9% to 6.0% as expected.

Up ahead, Aussie forex pairs could be in for another round of volatility, as the Land Down Under gears up to release its retail sales and trade balance data. Stronger than expected readings could reinforce the RBA’s not-so-downbeat outlook in yesterday’s interest rate statement, possibly spurring more gains for the Australian dollar.

See also:

London Session Recap

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