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

  • U.S. headline durable goods orders up 4.4% vs. 3.4% forecast
  • U.S. core durable goods orders up 1.5% vs. 0.4% forecast
  • U.S. initial jobless claims down from 262K to 261K vs. 265K consensus
  • U.S. flash services PMI dropped from 51.4 to 50.9 vs. 51.9 consensus
  • Canadian corporate profits down 3.4% in Q2, -4.6% previous

Rally and reverse! The U.S. dollar was off to a strong start but later on gave back most of its intraday gains on profit-taking.

Major Events:

Mostly upbeat U.S. data  Uncle Sam’s economic figures were mostly in the green once more, led by stronger than expected durable goods orders data. For the month of July, headline durable goods orders jumped by 4.4% versus the 3.4% forecast while core durable goods orders rose 1.5% vs. the 0.4% estimate. These represented strong rebounds from the previous month’s 3.9% decline in the headline figure and 0.4% drop in the core reading.

Initial jobless claims was also slightly better than expected at 261K versus the 265K consensus, reflecting a small dip from the earlier 262K figure. On the other hand, the flash services PMI for August slipped from 51.4 to 50.9 to show a slower pace of industry growth instead of rising to the projected 51.9 figure.

Profit-taking ahead of Yellen’s speech – The Jackson Hole Symposium officially kicked off yesterday but traders won’t be hearing from Fed head Yellen until today, which means that most of ’em took the chance to book their profits and run before this event risk spurs unforeseen moves.

A few U.S. central bank officials have been busy sharing their own policy biases lately, with Fed official Kaplan reiterating that growth could rebound in this second half of the year and that they should hike rates soon. While waiting for Yellen’s testimony, do check out Forex Gump’s things to keep in mind for the Jackson Hole event.

Major Currency Movers:

USD – The scrilla couldn’t seem to make up its mind in terms of which direction to take, as traders would rather wait for what Yellen has to say.

EUR/USD fell from 1.1288 to a low of 1.1270 before climbing back up to 1.1281, USD/JPY climbed from 100.49 to a high of 100.65 then retreated to 100.52, GBP/USD edged from 1.3191 to a low of 1.3173 then bounced back to 1.3193, and USD/CHF rose from .9661 to a high of .9681 before retreating to .9670.

Watch Out For:

  • 11:30 pm GMT: Japan national core CPI (-0.4% expected, -0.5% previous)
  • 11:30 pm GMT: Tokyo core CPI (-0.3% expected, -0.4% previous)
  • 5:00 am GMT: BOJ core CPI (0.8% previous)

See also:

Asian Session Recap

London Session Recap

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