U.S. Session Forex Recap – Mar. 14, 2016

  • Canadian economy lost 2.3K jobs in Feb vs. estimated 10.2K gain
  • Canada’s unemployment rate rose from 7.2% to 7.3%
  • U.S. import prices down 0.3% vs. 0.7% decline expected
  • U.S. oil rig counts drop again according to Baker Hughes
  • Chinese industrial production up by 5.4% y/y vs. 5.6% forecast
  • China’s fixed asset investment up by 10.2% y/y vs. 9.5% forecast
  • Chinese retail sales up by 10.2% y/y vs. 10.9% forecast

Is risk back on? Higher-yielding currencies outpaced their safe-haven forex rivals on Friday, despite downbeat jobs data from Canada.

Major Events:

Canadian employment report – The oil price slide continued to take its toll on Canada’s labor figures, contributing to the worse than expected 2.3K overall drop in joblessness for February. The health care and social assistance industry logged in a 20K decline in hiring while the educational services sector saw a 17K drop. These were enough to bring the country’s jobless rate up from 7.2% to 7.3% instead of holding steady as expected.

U.S. oil rig counts – Data from Baker Hughes revealed that the number of U.S. oil rigs dropped once more, leading to forecasts of much lower production levels. Total rigs fell from 489 to 480, its lowest level in 41 years, while natural gas rigs dropped from 97 to 94.

WTI crude oil rallied close to the $39/barrel level upon hearing the news while Brent crude oil tested the $41/barrel mark once more. If you’re wondering why this matters to forex traders, you gotta check out this primer on crude oil right here.

Mixed Chinese data – Over the weekend, China printed a fresh batch of top-tier data, giving forex traders more clues on how the world’s second largest economy is faring. Industrial production showed a decent 5.4% year-over-year gain, slightly lower than the estimated 5.6% increase, while fixed asset investment jumped by 10.2% versus the projected 9.5% rise. Retail sales turned out to be a bit of a disappointment with its 10.2% year-over-year increase instead of the 10.9% estimated gain.

Major Currency Movers:

Commodity currencies – The comdoll gang took advantage of the return in risk appetite, which was driven mostly by the pickup in crude oil prices.

USD/CAD retreated to a low of 1.3168 despite downbeat Canadian jobs data while CAD/JPY rose to a high of 86.23. AUD/USD broke out of consolidation to a high of .7580, NZD/USD popped back up to .6750 from the .6630 area, AUD/JPY surged past the resistance at 85.00, and NZD/JPY climbed more than a hundred pips to test the 77.00 handle.

USD & JPY – The U.S. dollar and Japanese yen were down in the dumps on Friday, even losing ground to the euro and the pound. Hey, that rhymes!

EUR/USD bounced off a low of 1.1081 to a high of 1.1193, GBP/USD surged to a high of 1.4436, and USD/JPY is still stuck in consolidation around 114.00. EUR/JPY moved past the area of interest at 126.00 to a high of 127.29 and GBP/JPY climbed past 162.00 to a high of 164.17.

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.

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