U.S. Session Forex Recap – Aug. 11, 2016

  • U.S. JOLTS job openings at 5.62 million vs. 5.52 million forecast
  • U.S. crude oil inventories up 1.1 million barrels vs. expected decline of 1.3 million barrels
  • RBNZ cut interest rates from 2.25% to 2.00% as expected
  • RBNZ officials emphasize possibility of more cuts if NZD keeps rising

The U.S. dollar struggled to rebound from its drop earlier in the day before traders turned their attention to the RBNZ statement.

Major Events:

RBNZ interest rate decision – As expected, the New Zealand central bank cut interest rates from 2.25% to 2.00% in their latest policy statement, with RBNZ head honcho Graeme Wheeler mentioning that further easing may be required.

However, most market participants had been expecting more dovishness from the central bank, with some even hoping for a 0.50% rate cut. Instead, Wheeler focused on the appreciating Kiwi, citing that it has been dragging export activity and domestic price levels lower. On a less downbeat note, Wheeler also acknowledged that domestic growth is being supported by strong migration, construction, and tourism.

Other RBNZ officials reiterated the possibility of more cuts if the Kiwi keeps rising but traders seemed to sense their reluctance and shrugged off these remarks. After all, their official statement also contained a few bits on housing inflation, reminding everyone that the RBNZ has to consider the risks of having a property bubble burst before easing again.

U.S. crude oil inventories – The U.S. Energy Information Administration reported another buildup in stockpiles to the tune of 1.1 million barrels versus the expected draw of 1.3 million barrels. This marks back-to-back gains in inventories, leading oversupply concerns to resurface. WTI crude oil slid back to $41.71/barrel, down 2.48% for the day.

Major Currency Movers:

USD – The Greenback tried to pare its losses from earlier in the day but was mostly unchanged against its peers during the New York session.

EUR/USD slid from 1.1186 to close at 1.1175 (-0.09%), GBP/USD fell from 1.3081 to a low of 1.2993 (-0.67%), AUD/USD is down from .7742 to .7705 (-0.25%), USD/JPY climbed from 101.17 to close at 101.28 (+0.10%), and USD/CHF started off at .9762 then slid to .9753 (-0.09%).

NZD – The Kiwi had a volatile run during the actual RBNZ statement, ending the session higher against its rivals despite the rate cut.

NZD/USD jumped from a low of .7184 to a high of .7343 (+2.13%), NZD/JPY rallied from 72.80 to a high of 74.32 (+2.08%), EUR/NZD tumbled to from 1.5500 to 1.5370 (-1.15%), and GBP/NZD is down from 1.8053 to a low of 1.7721 (-1.81%).

Watch Out For:

  • Japanese banks closed for the holiday
  • 1:30 am GMT: Australia MI inflation expectations
  • 1:45 am GMT: RBNZ head Graeme Wheeler’s testimony

See also:

Asian Session Recap

London Session Recap

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