U.S. Session Forex Recap – Aug. 3, 2016

  • U.S. core PCE price index up 0.1% as expected
  • U.S. personal income up 0.2% vs. 0.3% forecast
  • U.S. personal spending up 0.4% vs. 0.3% forecast
  • New Zealand GDT dairy prices increased by 6.6%

Data from the U.S. economy came in mixed but the Greenback ended mostly lower against its forex counterparts. What’s that all about?

Major Events:

U.S. economic data – The U.S. core PCE price index posted a 0.1% uptick in price levels as expected, slower than the previous 0.2% increase. Meanwhile, personal income rose 0.2% versus the 0.3% consensus and personal spending beat expectations with a 0.4% gain versus the projected 0.3% rise.

Components of the report showed that the pickup in personal income was driven by gains private wages but were offset by declines in personal dividend income and personal interest income. The increase in spending were mostly from electricity and gas, healthcare services, and other non-durable goods.

More crude oil weakness – Black Crack was dragged lower for yet another day as more market watchers chimed in with their estimates for crude oil inventories. Interestingly enough, Reuters projects a draw of 1.4 million barrels while Platts estimates a drop of 1.9 million barrels for the U.S. EIA stockpiles data due later today yet WTI crude oil broke below the $40/barrel barrier to close near $39.50/barrel (-1.37%).

Major Currency Movers:

USD – The U.S. dollar was forced to sit in the losers’ bench as it slid lower across the board.

EUR/USD popped up from 1.1191 to close at 1.1221 (+0.27%), USD/JPY continued to tread lower from 101.80 to 100.92 (-0.86%), and USD/CHF fell from .9660 to close at .9647 (-0.13%).

CAD – The Loonie had a volatile run but ended up joining its North American buddy in closing lower against its peers.

USD/CAD dipped to a low of 1.3004 before rallying back up to 1.3115 (+0.85%), CAD/JPY fell from 77.66 to 76.98 (-1.03%), and EUR/CAD jumped after hitting a low of 1.4586 to close at 1.4702 (+0.79%).

GBP – On the flip side, sterling was the big winner for the day as it rallied against its rivals, possibly on a short squeeze ahead of the BOE decision this week.

GBP/USD broke past the 1.3300 handle to a high of 1.3360 (+0.45%), EUR/GBP broke below .8450 to a low of .8402 (-0.56%), GBP/AUD rose from 1.7427 to the 1.7550 area (+0.70%), and GBP/CAD zoomed up from 1.7285 to a high of 1.7515 (+1.33%).

Watch Out For:

  • 1:00 am GMT: New Zealand ANZ commodity prices (3.7% previous)
  • 1:45 am GMT: China Caixin services PMI (52.9 expected, 52.7 previous)

See also:

Asian Session Recap

London Session Recap

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