U.S. Session Forex Recap – Apr. 1, 2016

  • Canadian economy grew by 0.6% vs. 0.3% forecast in Jan
  • U.S. initial jobless claims at 276K vs. 266K forecast, 265K previous
  • Chicago PMI up from 47.6 to 53.6 vs. 50.5 estimate
  • Fed official Dudley: Negative rates not on the table for the U.S.

The Greenback was off to a weak start during the U.S. session but was able to recover against its forex peers thanks to end-of-the-month profit-taking.

Major Events:

Canada’s January GDP – Canada printed a higher than expected January GDP reading of 0.6%, twice as much as the 0.3% estimate and much stronger than the previous 0.2% expansion. Components of the report showed that mining, quarrying, and oil and gas extraction contributed positively to growth.

Mixed U.S. economic data – First, the good news. The Chicago PMI surprised to the upside with its surge from 47.6 to 53.6 to indicate a much faster than expected pace of expansion in the manufacturing industry, outpacing the consensus at 50.6. And for the not-so-good news, initial jobless claims came in at 267K, slightly higher than the 266K forecast and the previous 265K reading.

Fed official Dudley’s testimony – New York Fed President William Dudley gave the dollar a bit of a boost when he assured forex market watchers that negative interest rates aren’t on the table for the U.S. economy. He explained that the FOMC is only behaving cautiously because of the uncertainty abroad but that the next Fed move would still be a rate hike.

Major Currency Movers:

USD – The U.S. dollar initially sold off then rallied, as forex junkies didn’t seem willing to hold on to large positions ahead of today’s NFP release.

EUR/USD surged to a high of 1.1412 before retreating to 1.1385, GBP/USD popped up to 1.4426 then fell back to 1.4365, USD/JPY was still stuck around the 112.50 area, and USD/CHF reached a low of .9572 before pulling up to the .9600 levels.

CAD – The Loonie’s day turned out to be the opposite of the dollar’s as the Canadian currency rallied then reversed.

USD/CAD dipped to a low of 1.2858 before retreating close to the 1.3000 handle, CAD/JPY popped up to a high of 87.46 then settled back to the 86.50 area, EUR/CAD dipped to a low of 1.4656 then rallied to 1.4785, and support around 1.8500 held for GBP/CAD.

Watch Out For:

  • 11:50 am GMT: Japanese Tankan manufacturing index (8 expected, 12 previous)
  • 11:50 am GMT: Japanese Tankan non-manufacturing index (24 expected, 25 previous)
  • 1:00 am GMT: Chinese official manufacturing PMI (49.3 expected, 49.0 previous)
  • 1:00 am GMT: Chinese official non-manufacturing PMI (52.7 previous)
  • 1:45 am GMT: Chinese Caixin manufacturing PMI (48.3 expected, 48.0 previous)
  • 2:00 am GMT: Japanese final manufacturing PMI (no revisions from initial 49.1 reading expected)
  • 5:30 am GMT: Australian commodity prices (-21.6% previous)

See also:

Asian Session Recap

London Session Recap

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