U.S. Session Forex Recap – June 9, 2016

  • U.S. JOLTS job openings increased to 5.79M vs. 5.67M forecast
  • U.S. crude oil inventories down by 3.2 million barrels
  • RBNZ decided to keep interest rates on hold at 2.25%
  • RBNZ head Wheeler: Inflation expectations seem to have stabilized

Comdolls were the stars of the forex show, thanks to rising crude oil prices and the RBNZ’s decision to keep interest rates unchanged.

Major Events:

Drop in U.S. oil stockpiles – Data from the U.S. Energy Information Administration showed that crude oil inventories chalked up three consecutive weekly declines, with a draw of 3.2 million barrels in the latest report.

This followed the earlier drop of 1.4 million barrels and the reduction of 4.2 million barrels in the week before that, easing fears of an oversupply and underscoring the OPEC’s view that the market is starting to stabilize. WTI crude oil popped up to $51.50/barrel and Brent crude oil rallied to $52.70/barrel upon seeing these numbers.

RBNZ interest rate statement – Nope, not this time, Kiwi bears! The RBNZ decided to sit on its hands once more, keeping interest rates unchanged at 2.25% instead of announcing a 0.25% cut as some analysts had expected. According to Governor Wheeler, inflation expectations seem to have stabilized and that the output gap appears to be closed by now.

He added they may or may not have one more interest rate cut for the year, explaining that they felt that further monetary stimulus is no longer needed by the economy for now. He also didn’t seem to be too worried about the Kiwi’s rally since he noted that their decisions are driven by inflation and not currency strength.

Major Currency Movers:

CAD – The oil-related Loonie was one of the strongest performers in the earlier part of the U.S. trading session.

USD/CAD dropped from the 1.2715 area to a low of 1.2655, CAD/JPY popped up to a high of 84.50 before retreating, EUR/CAD is down to a low of 1.4408, and GBP/CAD slipped to the 1.8400 major psychological support.

NZD – The Kiwi consolidated ahead of the RBNZ decision but ended up with strong rallies when the central bank didn’t cut.

NZD/USD popped up to a high of .7139, NZD/JPY is up to the 76.00 handle, EUR/NZD dropped to a low of 1.6010, GBP/NZD slumped nearly 300 pips to the 2.0400 levels, and AUD/NZD is down to a low of 1.0520.

Watch Out For:

  • Chinese banks closed on a holiday
  • 1:10 am GMT: RBNZ Governor Wheeler’s testimony
  • 1:30 am GMT: Chinese CPI y/y (2.3% expected, 2.3% previous)
  • 1:30 am GMT: Chinese PPI y/y (-3.1% expected, -3.4% previous)

See also:

Asian Session Recap

London Session Recap

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