- US ADP report: 213K vs. 220K forecast, 253K previous
- US ISM non-manufacturing PMI: 56.7 vs. 56.4 expected, 56.5 previous
- CA IVEY PMI: 45.4 vs. 53.4 expected, 55.4 previous
- ECB removes waiver on accepting junk-rated Greek government bonds
- Oil prices drops by 8% on supply reports
What a comeback! Just when we thought forex traders had lost love for the dollar, a couple of reports brought risk aversion back in vogue.
The dollar could have had a bad day if traders had only considered Uncle Sam’s reports. The ADP report, as well as the employment component of the ISM non-manufacturing PMI, painted a possible disappointment for tomorrow’s monster NFP report.
Luckily for Greenback bulls, traders were hit by risk aversion instead. For one thing, the rally in oil prices was set back in yesterday’s trading thanks to a report by the Energy Information Administration (EIA) saying that U.S. crude supplies hit their highest level in around 80 years. Brent fell by 6.5% to $54.16 while WTI fell by 8.7% to $48.60 per barrel.
The oil-related Loonie took the most hits from the news. USD/CAD shot up by 117 pips (+0.94%) to 1.2464, CAD/JPY fell by 94 pips (-1.00%), and GBP/CAD rocketed by 136 pips (+0.72%) to 1.9104.
And that’s not even the biggest news of the day! A couple of hours before the closing bell, the ECB announced that it would remove the waiver on accepting Greek government bonds as collateral to its loans. If you recall, Greece’s junk-rated bonds are below the ECB’s risk threshold. Removing the ECB’s waiver would limit the Greek banks’ options for additional capital.
The announcement inspired risk aversion across financial markets and weighed on high-yielding currencies.
EUR/USD closed 69 pips (-0.61%) lower at 1.1390, EUR/JPY dropped by a whopping 197 pips (-1.45%) to 133.59, and EUR/GBP slipped by 29 pips (-0.39%) to .7490.
Let’s see if Asian session forex traders pick up the risk aversion vibes. Australia is set to print its retail sales numbers at 1:30 am GMT. Analysts are predicting a 0.3% growth for the month of November, higher than October’s 0.1% uptick. A significantly lower release could extend the Aussie’s intraweek losses, so make sure you stick around when the report is printed!
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!