U.S. Session Forex Recap – July 26, 2016

  • WTI crude oil down to $43.10/barrel, lowest level since April
  • New Zealand trade surplus narrowed from 348M NZD to 127M NZD

No data? No problem! The lack of major economic releases didn’t stop several forex pairs from making big moves across the charts in the New York session.

Major Events:

Crude oil slide – Another day, another drop in crude oil! Word through the forex grapevine is that stockpiles are set to show a buildup this week, reviving fears of an oversupply and weighing on prices. WTI crude oil fell to $43.10/barrel, testing its April lows, while Brent crude oil is down to $44.83/barrel.

New Zealand trade balance – Just before U.S. session traders were able to call it a day, New Zealand printed its June trade balance, which indicated a smaller surplus of 127 million NZD compared to the earlier 348 million NZD figure. A closer look at the components of the report suggests that the trade picture ain’t so bad, as goods exports were actually up 5.8% compared to the previous quarter while goods imports increased 0.5%.

BOJ easing bets – Yen pairs were on the move as traders tried to read between the lines of BOJ Governor Kuroda’s and Economy Minister Ishihara’s remarks. Ishihara acknowledged that volatility in the Japanese yen has subsided for a bit, leading market watchers to predict that the central bank won’t need to do much to spur further weakness in their policy announcement this week. Rumors that the BOJ will take a moderate easing approach for now also contributed to a relief rally for the Japanese currency.

Major Currency Movers:

CAD – The Canadian dollar was still stuck in the losers’ bench, dragged lower by another sharp drop in crude oil prices.

USD/CAD climbed from 1.3171 to a high of 1.3242 (+0.54), CAD/JPY is down from 80.72 then briefly consolidated above 80.00 (-0.89%), EUR/CAD popped up 80 pips from 1.4467 to the 1.4530 area (+0.43%), and GBP/CAD is up a hundred pips from 1.7275 to 1.7375 (+0.58%).

JPY – Yen pairs tossed and turned over the past few hours as traders priced in BOJ easing expectations.

USD/JPY fell 50 pips from 106.25 to 105.75 (-0.47%), EUR/JPY rallied close to 117.00 before retreating back to its week open price at 116.50 (-0.43%), GBP/JPY fell from 139.55 to a low of 138.88 (-0.48%), and AUD/JPY is down 53 pips from 79.53 to 79.00 (-0.66%).

Watch Out For:

  • 11:50 pm GMT: Japan SPPI (0.2% previous, 0.1% expected)

See also:

Asian Session Recap

London Session Recap

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