- US initial jobless claims down to 278K vs. 285K expected, 288K previous
- US quarterly non-farm productivity up by 2.0% vs. 1.5% expected, 2.9% previous
- CA building permits up by 12.7% in September vs. 5.0% expected, 27.3% decline in August
- CA IVEY PMI down to 51.2 vs. 57.3 expected, 58.6 previous
- Draghi presents unanimous decisions, hints at lower forecasts and willingness to ease some more
The Greenback was once again king of the forex hill in yesterday’s U.S. trading session, as investors priced in Draghi’s dovish remarks and a possible strong NFP.
Speculations of a strong NFP report was the market theme in early U.S. session trading, especially after Uncle Sam’s initial jobless claims and quarterly non-farm productivity reports printed better-thane-expected.
USD/JPY ended the day near its intraday highs at 115.17 while USD/CHF shot up by 114 pips to .9734. Commodity-related dollars also felt the sting of dollar domination, as AUD/USD slid by 52 pips to .8564, USD/CAD inched another 18 pips higher to 1.1426, and NZD/USD fell by 47 pips to .7694.
Draghi stole the spotlight from the Greenback though, when he made his monthly press conference. For starters, he downplayed rumors of unrest over his leadership by emphasizing that this month’s policy decisions were unanimous.
He further flexed his dovish wings when he hinted that he’s seeing downward revisions to economic forecasts out next month. Last but definitely not the least, he reminded us that the ECB is on alert for worsening inflation prospects and signs that their current policies aren’t enough. If needed, the ECB is still able and willing to expand its stimulus program. Not so Super Mario for the euro now, huh?
Not surprisingly, the euro dropped across the board. EUR/USD dropped by a whopping 127 pips during the press conference and even ended the session 147 pips lower than its open price at 1.2376. EUR/GBP also closed 44 pips lower at .7816, while EUR/JPY fell by 96 pips to 142.53.
Will these trends continue over the next couple of hours? Asian forex traders don’t have a lot to look forward to with only Australia’s AIG construction PMI on tap at at 11:30 pm GMT, followed by the U.K.’s NIESR GDP estimate at 3:00 am GMT. With the NFP report only a few hours away, these reports are unlikely to cause sustained impact on their respective currencies. Instead, keep your eyes peeled for any opportunities that might pop up on NFP day!
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