U.S. Session Recap – December 12, 2013

  • Stanley Fisher named as leading candidate for Fed Deputy Chair
  • U.S. prints better than expected Federal budget balance
  • RBNZ kept interest rates unchanged at 2.50%
  • RBNZ head Wheeler more hawkish than expected
  • Australia reports 21.0K increase in hiring, jobless rate up from 5.7% to 5.8%

The lack of major economic data from the U.S. left the Greenback practically directionless in the latest New York trading session, as the currency lost ground to the euro, franc, and Loonie but strengthened against the pound and Aussie. The U.S. government reported a smaller than expected budget deficit of 135.2 billion USD versus the estimated 142.62 billion USD shortfall, but it was still larger compared to the previous 91.6 billion USD deficit.

Fed official Stanley Fisher was named as the leading candidate for Fed Deputy Chair, and it’s interesting to note how different he is from incoming Fed Chairperson Janet Yellen. For one, he has always been skeptical about the use of aggressive quantitative easing measures and isn’t so gung-ho about the Fed’s forward guidance communication strategy.

Meanwhile, the RBNZ decided to keep interest rates unchanged at 2.50% as expected, as Wheeler pointed out that the New Zealand economy has been expanding by more than 3%. He also cautioned about strong inflationary pressures, saying that an interest rate hike might be needed to contain price pressures at some point.

A few hours ago, Australia reported a better than expected employment change figure of 21.0K versus the estimate of a 10.3K increase, chalking up a nice rebound from the previous month’s 0.7K decline. However, the jobless rate still climbed from 5.7% to 5.8% for November, which seems to have an overall negative effect on the Australian dollar.

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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