U.S. Session Forex Recap – Dec. 16, 2015

  • U.S. headline CPI stayed flat in Nov as expected
  • U.S. core CPI came in line with consensus of 0.2% uptick
  • Empire State manu index improved from -10.7 to -4.6 vs. -5.7 forecast
  • Canadian manufacturing sales down by 1.1% in Oct. vs. -0.4% estimate
  • BOC Gov Poloz: Effect of this year’s rate cuts is kicking in
  • New Zealand GDT auction yields 1.9% gain in prices

And the Greenback is at it again! Fed liftoff expectations for tomorrow’s FOMC announcement and upbeat data from the U.S. economy allowed the dollar to advance against its forex counterparts.

Major Events:

Strong U.S. reports – Uncle Sam is reminding forex market watchers why the Fed is the only central bank with a tightening bias these days, as data came in line with expectations. The headline CPI stayed flat in November as expected while the core CPI printed a 0.2% uptick, which suggests that inflationary pressures are still present.

The Empire State manufacturing index rose from -10.7 to -4.6, reflecting a slower pace of industry contraction in November and outpacing the consensus of a climb to -5.7. Market participants also seem to be scrambling to score some last-minute pips ahead of the FOMC decision tomorrow, although Forex Gump thinks that the dollar might be in for a selloff then.

BOC Governor Poloz’s speech – The Canadian dollar drew a bit of support when BOC Governor Poloz gave himself a pat on the back for deciding to lower interest rates this year. Recall that the Canadian central bank decided to act pre-emptively before the oil price slump worsened, cushioning the blows on the energy industry. Poloz added that these rate cuts have eased the drop in incomes and that more signs of a recovery might be seen next year.

Major Currency Movers:

USD – Even though most dollar pairs appear to be treading carefully these days, the Greenback manage to squeeze out a few gains thanks to upbeat reports.

EUR/USD broke down from its short-term consolidation and is trading at 1.0919 (-0.65%), GBP/USD dipped below the 1.5050 minor psychological mark (-0.64%), USD/JPY is up 69 pips to 121.70 (+0.57%), and USD/CHF is up 74 pips to .9920 (+0.75%).

CAD – Reassuring remarks from BOC Governor Poloz allowed the Loonie to recover slightly, even though the Canadian currency failed to outpace the Greenback.

USD/CAD is flat at 1.3730 with the 1.3700 major psychological level holding as near-term support, CAD/JPY is up 49 pips to 88.61 (+0.56%), EUR/CAD is down 94 pips to the 1.5000 major psychological support (-0.63%), and GBP/CAD is down 136 pips to 2.0655 (-0.65%).

Watch Out For:

  • 2:35 am GMT: Japanese flash manu PMI (52.8 previous)

See more:

Asian Session Recap

London Session Recap

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