U.S. Session Forex Recap – Mar. 21, 2016

  • Canadian headline retail sales up by 2.1% vs. 0.7% forecast
  • Canadian core retail sales up by 1.2% vs. 0.6% forecast
  • Canada’s headline CPI up by 0.2% vs. 0.3% estimate
  • Canada’s core CPI up by 0.5% as expected
  • U.S. prelim UoM consumer sentiment index down from 91.7 to 90.0 in March
  • U.S. prelim UoM inflation expectations up from 2.5% to 2.7%

Risk on, baby! Higher-yielding currencies outpaced their safe-haven forex peers, as U.S. equities recouped most of their losses so far this year.

Major Events:

Canadian retail sales and CPI – Retail sales data from Canada came in much stronger than expected for the month of January, erasing the sharp losses seen last December. Headline consumer spending surged by 2.1%, thrice as much as the projected 0.7% rebound, while core retail sales jumped 1.2%. Components of the report revealed that the gains were mostly driven by higher sales of motor vehicles and parts, followed by purchases in general merchandise stores.

The February CPI report came in mixed, as the headline figure posted a smaller than expected 0.2% uptick compared to the projected 0.3% gain while the core reading came in line with expectations of a 0.5% increase. Lower gasoline prices had the biggest drag, but six out of the eight major CPI components indicated gains.

Mixed U.S. consumer data – The preliminary report from the University of Michigan indicated weaker consumer optimism for the current month, as the sentiment index fell from 91.7 to 90.0 instead of improving to the 92.1 consensus. Still, it’s worth noting that the consumer inflation expectations for March rose from 2.5% to 2.7% since these can manifest into higher price levels later on.

Equities party in the U.S.A. – Investors were nodding their heads like yeah and moving their hips like yeah upon seeing the Dow and S&P 500 index climb back to where they started this year. Stock indices logged in their third consecutive winning day following the FOMC statement, as the pickup in risk appetite was sustained until the end of the week.

The S&P 500 index managed to cap off the week with a 1.34% gain, the Dow 30 index scored a 2.24% win, and the Nasdaq ended with a 0.99% increase. This puts the S&P 500 and the Dow in positive territory so far this year, recovering from its brutal start.

Major Currency Movers:

CAD – Thanks to mostly positive economic data from Canada, the Loonie was able to advance against its forex rivals.

USD/CAD dipped to a low of 1.2924 before closing at 1.3036, CAD/JPY popped up to a high of 86.29 before retreating to 85.66, EUR/CAD tested support at the 1.4600 mark then closed at 1.4700, and GBP/CAD dipped to a low of 1.8736.

USD – The Greenback was also able to bring sexy back, chalking up a few gains against most of its counterparts on stronger U.S. stock market performance.

EUR/USD retreated from a high of 1.1337 to close at 1.1275, GBP/USD hit resistance near 1.4500 then ended at 1.4471, USD/CHF popped up from a low of .9659 to close at .9696, and USD/JPY found support at 111.00 then ended at 111.67.

Watch Out For:

  • 9:45 pm GMT: New Zealand visitor arrivals (2.9% previous)
  • Japanese banks closed on a holiday

See also:

Asian Session Recap

London Session Recap

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