U.S. Session Forex Recap – June 30, 2016

  • U.S. core PCE price index up by 0.2% as expected
  • U.S. personal income up by 0.2% vs. 0.3% consensus
  • U.S. personal spending increased by 0.4% as expected
  • U.S. pending home sales slumped 3.7% vs. projected 0.9% drop
  • U.S. crude oil inventories down 4.1 million barrels

Risk appetite extended its stay in the currency markets, boosted by hopes that the negotiations between the U.K. and EU might proceed smoothly.

Major Events:

U.S. economic data – Reports from the U.S. printed results that were mostly in line with expectations, restoring a bit of calm in the financial markets. The core PCE price index, which is rumored to be the Fed’s preferred measure of inflation, rose 0.2% as expected. U.S. personal income came in a notch below the projected 0.3% gain but personal spending still met expectations of a 0.4% increase.

U.S. equity indices closed in the green once more, with the Dow 30 index up 1.64% and the S&P 500 index up 1.70%. For some analysts, however, this rebound in risk-taking is nothing more than profit-taking for the end of the month and quarter. Yep, we’re already halfway into 2016!

Brexit-related updates – When it comes to the Brexit aftermath, it seems that no news is good news since this enables traders to keep their fingers crossed that negotiations could proceed smoothly. For German Finance Minister Schaeuble, there could be plenty of domino effects on the euro zone economies once the U.K. officially leaves the region. Meanwhile, European Commission President Juncker has mentioned that Scotland deserves to be heard in Brussels, possibly paving the way for its second independence referendum.

Major Currency Movers:

GBP – The British pound chalked up its third consecutive day of wins, thanks to stronger than expected data and end-of-the-quarter profit-taking.

GBP/USD rose from the 1.3400 area to a high of 1.3525 before retreating, GBP/JPY rallied from 136.75 to a high of 138.85, EUR/GBP retested support at the .8200 handle then climbed back to .8275, and GBP/AUD found resistance at 1.8170.

CAD – The Loonie also managed to post strong gains for the day after crude oil prices strengthened on a larger than expected draw in inventories.

USD/CAD fell from the 1.3000 area to a low of 1.2930, CAD/JPY surged past the 79.00 handle to a high of 79.47, EUR/CAD is down to 1.4400, and GBP/CAD found resistance at 1.7575 and is down to 1.7415.

Watch Out For:

  • 11:45 pm GMT: New Zealand building consents
  • 12:05 am GMT: U.K. GfK consumer confidence index
  • 12:50 am GMT: Japanese preliminary industrial production (-0.1% expected, +0.5% previous)
  • 2:00 am GMT: New Zealand ANZ consumer confidence index
  • 2:30 am GMT: Australia’s private sector credit (0.5% expected, 0.5% previous)
  • 6:00 am GMT: Japanese housing starts data

See also:

Asian Session Recap

London Session Recap

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