Article Highlights

  • US Challenger job cuts: 17.6% vs. 6.6% previous
  • US initial jobless claims: 278K vs. 290K expected, 267K previous
  • US trade balance: 46.60 billion USD deficit vs. 38.00 billion USD deficit expected, 39.8 billion USD deficit previous
  • CA trade balance: 0.65 billion CAD deficit vs. 1.10 billion CAD deficit expected, 0.34 billion CAD deficit previous
  • US quarterly labor costs (prelim): 2.7% vs. 1.2% expected, -2.3% previous
  • US quarterly non-farm productivity (prelim): -1.8% vs. 0.1% expected, 3.7% previous
  • Oil jumps by 5%, boosts CAD
  • New Zealand on Waitangi Day bank holiday
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Dollar selloff was the name of the game during the U.S. forex trading session, as investors square off their long positions ahead of the NFP report.

A worse-than-expected U.S. trade report didn’t help either. Data revealed a deficit of $46.6 billion, the largest since November 2012, and suggested a weaker Q4 2015 GDP for Uncle Sam.

The report, combined with profit-taking ahead of the NFP release, was enough to boost EUR/USD 75 pips higher (+0.66%) to 1.1486, while GBP/USD also shot up by 95 pips (+0.62%) to 1.5337. Meanwhile, USD/JPY lollygagged around the 117.50 area and USD/CHF fell by 58 pips (-0.63%) to .9223.

Even the comdolls were in on the dollar selloff party. The Loonie was the biggest gainer among commodity-related currencies, likely due to oil prices rebounding on violence in oil-producing Libya and increased expected demand from China after the PBoC’s latest easing measures. Brent crude capped the day 4.5% higher at $57.57, while U.S. crude oil prices settled 4.2% higher at $50.48.

Not surprisingly, USD/CAD dropped by 99 pips (-0.79%) to .12423, while CAD/JPY’s jumped 87 pips higher (+0.93%) to 94.61. The Aussie and Kiwi didn’t see as much action with AUD/USD only inching 13 pips higher (+0.17%) to .7818 and NZD/USD closing 21 pips higher (+0.28%) than its session open price.

Let’s see if today’s Asian session forex traders keep up the dollar-selling vibes. New Zealand is on a bank holiday today, but Australia is set to print its AIG construction PMI at 12:30 am GMT, while Japan is scheduled to release its preliminary leading indicator report at 6:00 am GMT.

These reports don’t usually have sustained impact on the Aussie and the yen, so keep your eyes peeled for possible continuation of the U.S. session’s price action.

Good luck!

See also:

London Session Recap

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