U.S. Session Forex Recap – May 3, 2016

  • U.S. ISM manufacturing PMI down from 51.8 to 50.8 vs. 51.6 forecast
  • U.S. ISM manu PMI jobs component up from 48.1 to 49.2
  • U.S. ISM manu PMI prices up from 51.5 to 59.0 vs. 51.0 forecast
  • SNB head Jordan: CHF remains significantly overvalued

The weaker than expected ISM manufacturing PMI reading weighed on the dollar’s performance even though several components showed improvements.

Major Events:

U.S. ISM manufacturing PMI – For the month of April, the ISM manufacturing PMI is down from 51.8 to 50.8 instead of just dipping to the estimated 51.6 reading. The biggest drags were from inventories and new orders, followed by slowing production and supplier deliveries.

On a less downbeat note, the employment component climbed from 48.1 to 49.2 to indicate a slower pace of contraction. The sub-index on prices jumped from 51.5 to 59.0 instead of falling to 51.0, possibly reflecting the pickup in crude oil and fuel costs then.

SNB head Jordan’s testimony – It’s all about jawboning from the central bankers these days, and SNB head honcho Thomas Jordan isn’t one to get left behind. In his speech about the euro and Swiss monetary policy yesterday, he reiterated that the Swiss franc remains significantly overvalued. He acknowledged that their negative interest rates policy is helping restrain the franc’s gains but he added that monetary policy alone might not be enough.

Major Currency Movers:

USD – The Greenback was still in the losers’ table, as traders dumped the U.S. currency upon seeing downbeat U.S. data.

EUR/USD climbed past the 1.1450 resistance onto a high of 1.1535, GBP/USD also broke through the near-term resistance at 1.4650 onto a high of 1.4696, USD/JPY resumed its slide and is testing the 106.00 handle, and USD/CHF dipped to a low of .9544.

AUD – The Aussie took a break from its slide, with forex junkies probably reducing their positions ahead of today’s RBA decision.

AUD/USD bounced from a low of .7610 to a high of .7676, AUD/JPY rallied to a high of 81.66, EUR/AUD retreated close to the 1.5000 major psychological support, and GBP/AUD is down to the 1.9100 levels.

Watch Out For:

  • Japanese banks closed in observance of Constitution Day
  • 1:30 am GMT: Australian building approvals (-1.8% expected, +3.1% previous)
  • 1:45 am GMT: Chinese Caixin manu PMI (49.8 expected, 49.7 previous)
  • 4:30 am GMT: RBA interest rate decision (Check out this trading guide!)

See also:

Asian Session Recap

London Session Recap

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