U.S. Session Forex Recap – May 25, 2016

  • U.S. new home sales up from 531K to 619K vs. 521K forecast
  • Richmond manufacturing index fell from 14 to -1 in May
  • New Zealand trade surplus at 292M NZD vs. 40M NZD forecast

Improved risk appetite forced the safe-haven dollar to return some of its recent wins but it still managed to close higher against the euro and yen.

Major Events:

Strong new home sales – There wasn’t much on the U.S. economic calendar for the previous New York session so traders simply took their cue from the medium-tier releases. New home sales printed stronger than expected results, surging to 619K in April from an upgraded 531K March reading. This supports the ongoing recovery in the consumer sector, as buying a brand-new home typically leads to purchases of furniture, appliances, home decor – the works!

Crude oil rallies – Data from the American Petroleum Institute showed a decline of 5.137 million barrels in crude oil stockpiles, easing fears of an oversupply and hinting that the U.S. Energy Information Administration might also show a reduction in inventories. However, some analysts noted that this might just be a temporary dip due to the wildfires in energy-rich Alberta earlier in the month.

WTI crude oil popped up to a high of $49.17/barrel while Brent crude oil rallied to $49.11/barrel. Gold, on the other hand, plummeted to a low of $1,222.69/ounce.

Major Currency Movers:

JPY – The Japanese currency returned its gains for the day and more, as risk appetite improved during the U.S. trading session.

USD/JPY climbed back above the 109.50 handle to a high of 110.20, EUR/JPY is still stuck in consolidation around 122.50, GBP/JPY jumped from 158.00 to 161.00, and AUD/JPY pulled up from a low of 78.37 to a high of 79.20.

GBP – The pound carried on with its strong climb from the earlier sessions, lifted by anti-Brexit remarks from BOE Governor Carney a few hours back.

GBP/USD rallied to a high of 1.4643, EUR/GBP found resistance at .7750 then tumbled to .7620, GBP/AUD carried on with its climb to a high of 2.0421, and GBP/CAD rallied back to the 1.9200 handle.

Watch Out For:

  • 1:30 am GMT: Australia construction work done q/q (-1.4% expected, -3.6% previous)

See also:

Asian Session Recap

London Session Recap

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