U.S. Session Forex Recap – Mar. 28, 2016

  • Core PCE Price Index (3rd Est.) q/q annual.: 1.3% vs. 0.9% expected, 1.3% previous
  • GDP Price Index (3rd Est.) q/q annual.: 0.9% vs. 1.0% expected, 0.9% previous
  • GDP Annualised (3rd Est.) q/q annual.: 1.4% vs. 1.0% expected/previous

Thanks to the latest revision to U.S. Q4 GDP, forex traders got to see a little bit of volatility during the holiday environment on Friday.

Major Events:

U.S. Q4 2015 GDP Revision – Great news for the U.S. on Friday as the 2015 fourth quarter read on GDP was revised higher to 1.4% from the 1.0% forecast.  This was largely due to strong consumer spending, which was likely due to the drop in oil prices (cheaper energy spend tends to give consumers more discretionary income).

Unfortunately that drop in oil prices may be the reason for the ugly takeaway from the GDP revision: falling corporate profits by a magnitude of 11.5% year-over-year for the fourth quarter. This is a cause for concern as falling earnings tends to be followed by recessionary conditions, but it seems like the focus for the forex traders that were still around was the improvement on the headline reading.

Major Currency Movers:

USD – Because of the Easter holiday, the currency markets were so quiet that you can hear a pin drop…on a pillow…from the moon.  Okay, that’s a bit of an exaggeration but for the most part, the currency markets were in snooze mode on Friday with a lot of pairs staying in 20 – 40 pip ranges throughout the session.

We did get some directional action in U.S dollar pairs after the positive headline revision to  2015 fourth quarter GDP, mainly the Greenback making small gains against most of the majors on the session after dipping during London trade.

EUR/USD closed at 1.1159 after London session highs at 1.1175, GBP/USD closed 1.4132 after session highs around 1.4156, and USD/JPY closing at 113.02 after hitting session lows around 112.88

Comdolls – Commodity currencies also made slight directional moves, likely on the fresh weakness in commodity/risk sentiment after the blow oil bulls took after last Wednesday’s U.S. oil inventories report of much higher stockpiles than expected.

AUD/USD closed at .7501 after London session highs at .7535, NZD/USD closed .6679 after session highs around .6714, and USD/CAD closing at 1.3260 after hitting session lows around 1.3225

Watch Out For:

No upcoming economic news or economic data points scheduled. Liquidity will likely be light as many Asia and European financial markets will stay closed for the Easter holiday until Tuesday.

See also:

Asian Session Recap

London Session Recap

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