U.S. Session Forex Recap – Mar. 4, 2016

  • U.S. initial jobless claims at 278K vs. 271K forecast
  • U.S. revised non-farm productivity for Q4 down by 2.2%
  • U.S. revised unit labor costs for Q4 downgraded from 4.5% to 3.3%
  • U.S. ISM non-manu PMI dipped from 53.5 to 53.4 vs. 53.2 forecast
  • U.S factory orders up 1.6% in Jan vs. 2.1% estimate

Not a good day to be a dollar bull, eh? The U.S. currency tumbled against its forex counterparts, knocked down by weaker than expected economic figures.

Major Events:

Weaker than expected U.S. data – I’m seeing red! Even though the U.S. economy posted some economic improvements, the gains were much weaker than what analysts had in mind. Initial jobless claims landed at 278K versus the 271K forecast, also higher than the previous week’s 272K increase.

Meanwhile, non-farm productivity data for Q4 2015 showed a 2.2% decline, slower than the projected 3.2% drop, and unit labor costs were downgraded from 4.5% to 3.3% in the same period. Factory orders posted a 1.6% rebound for January, lower than the estimated 2.1% rise. Lastly, the ISM non-manufacturing PMI figure fell from 53.5 to 53.4 in February, as the employment component dropped from 52.1 to 49.7 to indicate contraction.

Pre-NFP jitters – Forex traders probably started unwinding some of their dollar positions ahead of today’s non-farm payrolls release in order to avoid exposing their portfolios to this event risk. If you’re planning on trading this report or just wondering what the fuss is all about, don’t forget to check out Forex Gump’s Trading Guide for the NFP.

Major Currency Movers:

AUD – The Aussie seemed unstoppable in its climb, even as its other comdoll peers (NZD and CAD) decided to take it easy.

AUD/USD advanced to a high of .7371, AUD/JPY came within 20 pips shy of the 84.00 handle, EUR/AUD reached a low of 1.4822, but GBP/AUD popped up to the 1.9300 area.

USD – The dollar gave up ground against its forex rivals due to downbeat data and positioning ahead of the NFP.

EUR/USD carried on with its climb throughout the day, as it rose from the 1.0880 area to a high of 1.0971 during the U.S. session. GBP/USD pulled up to a high of 1.4194, USD/JPY dipped to a low of 113.30, and USD/CHF crashed to the .9900 handle.

Watch Out For:

  • 12:00 am GMT: Japanese average cash earnings y/y (0.2% expected, -0.2% previous)
  • 12:30 am GMT: Australian retail sales m/m (0.4% expected, 0.0% previous)

See also:

Asian Session Recap

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

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