U.S. Session Forex Recap – Feb. 12, 2016

  • U.S. initial jobless claims at 269K vs. 287K expected, 285K previous
  • Fed head Yellen: Will take USD strength into account for policy
  • OPEC member nations ready to cut production?
  • IMF: Grexit fears could resurface
  • Japanese authorities watching yen’s forex rallies closely
  • RBA Gov Stevens: Unlikely to be raising rates this year

The lack of top-tier data in yesterday’s U.S. trading session wasn’t enough to stop the major currencies from showing off their moves in the forex dance floor, as headlines from the financial world made investors jittery.

Major Events:

Yellen’s speech: Round 2 – The Greenback braced itself for another round of volatile forex price action as Fed Chairperson Yellen stepped up to the podium to deliver another testimony. This time, the head honcho of the U.S. central bank decided to focus on currency trends, citing that the Fed will take the dollar’s recent rallies into account when making policy decisions.

This suggests that Yellen is also starting to become concerned about the negative impact of the dollar’s appreciation on domestic inflation, which is something that other FOMC members pointed out in their previous speeches.

Jawboning from Japan? – Japanese authorities don’t seem to be too pleased about the yen’s recent rallies either, as a government official remarked that they are watching the forex market closely with a sense of urgency. Gee, I wonder what that means…

Prior to this, yen pairs suddenly spiked higher after diving sharply during the previous trading sessions, leading some market watchers to speculate that BOJ ninjas might be intervening in the currency arena already.

OPEC ready to cut production? – Are the hotshots over at the oil cartel finally ready to cooperate? Word through the grapevine is that OPEC leaders might be willing to cut oil production if non-OPEC members join them.

As it turns out, Venezuela had also proposed a production freeze but Saudi officials said that they’d participate only if Iran does. And that seems unlikely since Iran just pledged to ramp up their production now that they’ve just returned to the oil export market.

Major Currency Movers:

JPY – Yen bulls retreated quickly after their strong charge in previous trading sessions, as traders got wind of BOJ intervention chatter.

USD/JPY tested a low of 110.98 before quickly rebounding to a high of 113.26, EUR/JPY bounced off 125.80 to a high of 127.83, GBP/JPY dipped to a low of 159.84 then surged to 163.25, and AUD/JPY pulled up to retest the 80.00 handle after reaching a low of 77.62.

USD – The U.S. dollar also erased its gains from earlier in the day but at a slower pace compared to the Japanese yen.

EUR/USD went on to climb to new highs at 1.1375, GBP/USD bounced of a low of 1.4385 to a high of 1.4492, AUD/USD continued to find support at .7000 and is back at the .7100 area again, and NZD/USD bounced off .6600 to a high of .6740.

Watch Out For:

  • 12:00 am GMT: Australian home loans (2.9% expected, 1.9% previous)

See more:

Asian Session Recap

London Session Recap

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