U.S. Session Forex Recap – July 21, 2016

  • U.S. crude oil inventories down by 2.3 million barrels
  • New Zealand visitor arrivals down by 1.0% in June
  • RBNZ: Decline in NZD exchange rate is needed
  • RBNZ: More easing likely needed to return inflation to target

The Greenback’s performance was as mixed as a bag of M&Ms since it advanced to the commodity currencies and Japanese yen but lagged behind its European counterparts.

Major Events:

No major reports from the U.S. – The lack of top-tier data from the U.S. economy left the Greenback behaving merely as a counter currency in yesterday’s New York session. The only release from Uncle Sam was the crude oil inventories report, which showed a draw of 2.3 million barrels versus the projected drop of 1.3 million barrels.

RBNZ economic update – Before U.S. session traders were able to call it a day, the RBNZ printed its unscheduled economic update, which turned out dovish as many expected. According to the central bank, a decline in the exchange rate and more easing are likely needed to return inflation closer to target. RBNZ officials also enumerated the uncertainties the economy is facing, both on the international and domestic fronts.

When it comes to the booming property market, policymakers noted that house price inflation remains excessive and that they are considering putting measures in place to cool things down a bit. The central bank concluded by saying that monetary policy will remain accommodative and that they will continue to monitor economic data closely… which means you should, too!

Major Currency Movers:

NZD – The Kiwi plummeted against its forex rivals towards the latter part of the U.S. session when the RBNZ expressed its easing bias.

NZD/USD broke below support at the .7000 major psychological level to a low of .6954 (-1.13%), NZD/JPY reached a high of 75.24 then dropped a hundred pips to a low of 74.23 (-1.34%), EUR/NZD broke above its short-term consolidation at 1.5650 to rally 125 pips (+0.79%), and GBP/NZD surged past the 1.5800 handle to climb 150 pips to a high of 1.9054 (+0.94%).

JPY – The yen was also a big loser for the day as it continued to slide on whispers of a 20 trillion JPY stimulus package from the government.

USD/JPY climbed around 50 pips from a session low of 106.53 to a high of 107.04 (+0.47%), EUR/JPY moved close to a hundred pips higher to test the 118.00 handle (+0.67%), GBP/JPY climbed from the 140.00 handle to a high of 142.33 (+1.66%), and AUD/JPY rose from support at 79.50 to a high of 80.06 (+0.70%).

Watch Out For:

  • 1:30 am GMT: Australia NAB quarterly business confidence index
  • 3:00 am GMT: New Zealand credit card spending
  • 4:30 am GMT: Japan’s all industries activity index

See also:

Asian Session Recap

London Session Recap

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