U.S. Session Forex Recap – Oct. 13, 2016

  • U.S. JOLTS job openings down from 5.83M to 5.44M vs. 5.79M forecast
  • FOMC minutes: Policymakers saw “reasonable argument” to hike in Sept
  • FOMC to proceed cautiously with tightening monetary policy
  • FOMC minutes: Inflation, domestic and int’l growth risks tilted to the downside
  • New Zealand Business NZ manufacturing index up from 55.2 to 57.7

The Greenback tossed and turned upon seeing the FOMC meeting minutes, but eventually ended up higher on stronger Fed rate hike expectations.

Major Events:

FOMC meeting minutes – The release of the transcript of the Fed’s September huddle was the highlight of the New York session. If you recall, three hawkish members voted to hike interest rates right there and then while the rest wanted to stay put for the time being.

As expected, policymakers admitted that the case for hiking interest rates has strengthened. They even said that the decision was a “close call” since they saw “reasonable argument” to increase interest rates in September, such as impressive improvements in the labor market and a bit of progress in inflation.

However, majority of the policymakers still reiterated that they’d proceed cautiously with tightening monetary policy since risks to inflation, as well as domestic and international growth, are tilted to the downside. Nonetheless, the minutes still left market participants thinking that a November hike is a possibility while upping the odds for a December move.

Major Market Movers:

USD – The U.S. currency was slightly weaker earlier in the day but it managed to recover as traders reviewed the FOMC minutes.

EUR/USD carried on with its slide from 1.1024 to a low of 1.1003 after spiking up to a high of 1.1047, GBP/USD popped up to 1.2232 to a low of 1.2190, USD/CHF is up from .9891 to a high of .9908, AUD/USD is down from a high of .7857 to a low of .7525, and NZD/USD slid from .7092 to .7038.

JPY – The Japanese yen returned most of its recent gains, as risk-averse traders flocked back to the safe-haven U.S. dollar.

USD/JPY advanced from 103.76 to a high of 104.64, EUR/JPY is up from 114.14 to a high of 115.17, AUD/JPY popped up from 78.60 to a high of 78.98, NZD/JPY is up from 73.27 to a high of 73.80, and CAD/JPY rose from 78.26 to a high of 78.91.

Watch Out For:

  • 12:00 am GMT: Australia MI inflation expectations
  • Tentative: Chinese trade balance (365B CNY expected, 346B CNY previous)
  • 4:30 am GMT: Japanese tertiary industry activity index (-0.2% expected, +0.3% previous)

See also:

London Session Recap

Asian Session Recap

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