U.S. Session Forex Recap – August 12, 2016

  • U.S. initial jobless claims at 266K vs. 272K forecast
  • U.S. import prices up 0.1% vs. projected 0.2% drop
  • New Zealand headline retail sales up 2.3% vs. 1.0% consensus for Q2
  • New Zealand core retail sales up 2.6% vs. 1.1% forecast

Crude oil rallies stole the forex show in the U.S. trading session, driving the positively-correlated Loonie higher across the board.

Major Events:

Upbeat U.S. economic data Uncle Sam printed mostly stronger than expected medium-tier reports, but these didn’t seem enough to push the Greenback in a particular direction. Initial jobless claims stood at 266K, lower than the projected 272K figure and the previous 267K reading, which indicates progress in the jobs market. Import prices posted a 0.1% uptick for July instead of showing the projected 0.2% drop while the previous reading was upgraded from 0.2% to 0.6%, hinting at stronger domestic inflation.

Comments from Saudi Arabia’s energy minister – Crude oil got a strong boost after Saudi Arabia’s energy minister reiterated that the commodity is “back to a level where it seems to be stabilizing.” According to Khalid al-Falih, their upcoming OPEC meeting in September 26-28 would focus on discussions about the current market situation and whether or not any action would be needed to further stabilize prices.

In addition, the energy minister said that he expects demand for Saudi’s crude oil to remain strong and that inventories all over the world might soon need to be restocked as the market rebalances itself. WTI crude oil popped up to $43.49/barrel, up $1.78 for the day (+4.27%).

New Zealand retail sales – Before U.S. session traders called it a night, New Zealand released its retail sales figures for Q2 2016. The headline figure posted a 2.3% gain versus the estimated 1.0% rise while the core version of the report printed a 2.6% increase versus the projected 1.1% gain. This also reflected improvements over the previous quarter’s readings.

Components of the report revealed that 12 out of the 15 industries included in the calculations saw higher volumes. These were led by higher spending in hardware, building, and garden supplies, motor vehicle and parts retailing, and food and beverage services.

Major Currency Movers:

CAD – The oil-related Loonie piggybacked with crude oil in posting strong gains for the day.

USD/CAD broke below the 1.3000 barrier to a low of 1.2957 (-0.34%), CAD/JPY was up from 77.71 to 78.48 (+0.99%), EUR/CAD plummeted from 1.4544 to 1.4462 (-0.56%), and GBP/CAD fell from 1.6918 to a low of 1.6786 (-0.78%).

Watch Out For:

  • 2:00 am GMT: Chinese industrial production y/y (6.2% expected, 6.2% previous)
  • 2:00 am GMT: Chinese fixed asset investment ytd/y (8.9% expected, 9.0% previous)
  • 2:00 am GMT: Chinese retail sales y/y (10.5% expected, 10.6% previous)

See also:

Asian Session Recap

London Session Recap

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