U.S. Session Forex Recap – Apr. 27, 2016

  • U.S. headline durable goods orders up by 0.8% vs. 1.9% forecast
  • U.S. core durable goods orders down by 0.2% vs. estimated 0.6% gain
  • U.S. flash services PMI up from 51.3 to 52.1 vs. 52.3 forecast
  • Richmond manufacturing index down from 22 to 14 vs. 11 forecast

The Greenback slid lower against its forex rivals when traders saw mostly weaker than expected U.S. data and started closing their dollar positions ahead of today’s FOMC statement.

Major Events:

Mixed U.S. economic reports – Durable goods orders data came in much weaker than expected, as the headline figure posted a 0.8% uptick versus the projected 1.9% gain while the core reading printed a 0.2% decline instead of the estimated 0.6% gain. To top it off, the previous readings were downgraded to show sharper declines of 3.0% for the headline number and 1.3% for the core version of the report.

Meanwhile, the flash services PMI showed an improvement from 51.3 to 52.1 to indicate a faster pace of industry expansion, but this reading was slightly lower than the 52.3 consensus. The Richmond manufacturing index slid from 22 to 14 to show a slowdown in industry growth, but this was a few notches higher than the projected drop to 11.

Brexit opinion poll results – The British pound returned some of its recent wins after a survey conducted by opinion poll firm ICM revealed a narrow lead for voters who want to leave the EU. Recall that the currency had been drawing support from anti-Brexit remarks in the past few days, as traders probably thought that this would tip the scales in favor of staying in the region.

For the latest survey, 46% of voters were pro-Brexit. Still wondering what the fuss is all about? We’ve got a Brexit primer for you right here.

Major Currency Movers:

USD – The U.S. dollar gave up some of its previous wins as traders are starting to reduce their exposure ahead of the FOMC statement.

EUR/USD climbed from the 1.1275 area to a high of 1.1339 before retreating to the 1.1300 handle, USD/JPY dipped to a low of 110.67 but climbed back up to 111.45, USD/CHF touched a low of .9702, and AUD/USD climbed to a high of .7765.

GBP – The pound was still one of the strongest currencies for the day but it made a bit of a pullback upon seeing the latest ICM poll results.

GBP/USD reached a high of 1.4578 then dipped back to the 1.4550 handle, GBP/JPY broke above consolidation to a high of 162.70 before retreating to 162.00, EUR/GBP is still hovering around .7750, and GBP/AUD fell from 1.8893 to 1.8800.

Watch Out For:

  • 10:45 am GMT: New Zealand trade balance (405M NZD expected, 367M NZD previous)
  • 1:30 am GMT: Australian quarterly CPI (0.3% expected, 0.4% previous)
  • 4:30 am GMT: Japanese all industries activity index (-1.3% expected, 2.0% previous)

See also:

Asian Session Recap

London Session Recap

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