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

  • U.S. headline retail sales down 0.1% vs. estimated 0.1% increase
  • U.S. core retail sales show 0.2% uptick vs. 0.4% forecast
  • U.S. headline PPI down 0.1% vs. projected 0.3% gain
  • U.S. core PPI down 0.1% vs. projected 0.1% increase
  • BOC kept interest rates on hold at 0.50% as expected
  • U.S. crude oil inventories up by 6.9 million barrels
  • New Zealand Business NZ manu index down from 55.9 to 54.7

I’m seeing red! U.S. economic reports printed weaker than expected results but the Greenback seemed to benefit from risk aversion.

Major Events:

Weak U.S. economic data – Consumer spending and producer prices fell short of expectations, suggesting that the U.S. economy ain’t out of the woods yet. Headline retail sales dropped 0.1% instead of posting the projected 0.1% increase for March while the core version of the report showed a smaller than expected 0.2% uptick versus the estimated 0.4% gain.

Components of the retail sales report revealed that these declines were mostly caused by declining auto sales. Meanwhile, headline producer prices were down 0.1% instead of printing the estimated 0.3% increase and the core PPI showed a 0.1% drop as well.

BOC rate statement – As expected, the Bank of Canada kept interest rates unchanged at 0.50% during their monetary policy decision. However, policymakers downgraded their growth outlook for this year and the next, citing deeper than expected cuts to energy sector investment.

Their press release also indicated that central bankers doubt that the strength in the first quarter GDP could be sustained and that the temporary factors that spurred growth might be reversed this quarter. Yikes!

Major Currency Movers:

USD Dollar bulls finally came out to play, as weaker than expected U.S. data forced investors to scale back on risk.

EUR/USD made a break below its tight consolidation and reached a low of 1.1266, USD/JPY climbed above the 109.00 handle to test 109.50, USD/CHF surged to a high of .9671, and GBP/USD retreated below the 1.4200 major psychological mark.

EUR The euro was one of the weakest performing currencies for the day, as ECB officials continued to discuss the risks to the euro zone economy.

EUR/JPY dipped to the 123.00 major psychological support, EUR/GBP retreated to a low of .7925, EUR/AUD is down to 1.4727, and EUR/NZD is testing support at the 1.6300 handle.

Watch Out For:

  • 2:00 am GMT: Australia MI inflation expectations (3.4% previous)
  • 2:30 am GMT: Australian jobs data (Check out Forex Gump’s Trading Guide!)

See also:

Asian Session Recap

London Session Recap

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