U.S. Session Forex Recap – Apr. 8, 2016

  • U.S. initial jobless claims at 267K vs. 271K forecast, 276K previous
  • Fed head Yellen acknowledged progress on inflation
  • Fed head Yellen said U.S. economy is near maximum employment
  • Canadian building permits jump 15.5% vs. estimated 4.7% gain
  • U.S. consumer credit up from $14.9B to $17.2B vs. $15B forecast

Forex junkies weren’t in the mood to take on more risk, as central bank officials talked of currency intervention and more aggressive easing measures.

Major Events:

Intervention and easing chatter – During the earlier trading sessions, forex price action was already pretty busy, as market watchers got wind of reports suggesting that Japanese officials might intervene in the currency market and that the ECB actually considered a larger stimulus injection in their latest policy decision.

These themes continued to influence market moves in the New York trading session, as traders called the BOJ’s bluff and even pushed the yen higher across the forex charts while others liquidated their riskier holdings on risk aversion.

Upbeat remarks from Yellen – Fed head Yellen wasn’t her usual downbeat self in her latest testimony, as she decided to highlight the U.S. economy’s progress in inflation and in nearing maximum employment. She also assured that U.S. asset values are not overvalued and that there is no bubble that’s about to burst.

Major Currency Movers:

JPY – Even with its strong rallies earlier in the day, the Japanese yen still had some gas left for more gains during the U.S. session.

USD/JPY tumbled from the 108.55 area to a low of 107.68, EUR/JPY broke below the 123.00 handle to a low of 122.57, GBP/JPY slide from 152.50 to a low of 151.69, and AUD/JPY fell from the 82.00 levels to a low of 80.70.

USD The Greenback got a double boost from risk-off action and relatively optimistic remarks from Fed Chairperson Yellen.

EUR/USD dropped to a low of 1.1338 before consolidating, GBP/USD tested support at the 1.4050 minor psychological mark, USD/CHF bounced back above the .9550 mark to a high of .9580, AUD/USD is testing support at .7550, and USD/CAD popped up to 1.3176.

Watch Out For:

  • 12:50 am GMT: Japanese current account balance (1.57T JPY expected, 1.49T JPY previous)
  • 1:15 am GMT: FOMC member Esther George’s testimony. Hawk alert!
  • 6:00 am GMT: Japan’s consumer confidence index (40.5 expected, 40.1 previous)

See also:

Asian Session Recap

London Session Recap

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