Article Highlights

  • U.S. existing home sales: 4.88M vs. 4.92M expected, 4.82 previous
  • EZ flash consumer sentiment: -4 vs. -6 expected, -7 previous
  • Draghi: ECB on track to meet its QE targets
  • Fed’s Fischer: rate hike warranted before end of the year
  • Commodities up, U.S. yields down during the session
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Low-yielding currencies took another step back during the U.S. session, as forex traders priced in a bit of risk appetite on a lack of market-moving economic reports.

The Australian dollar led the pack thanks to higher gold prices (up by 0.3%!) and positioning ahead of this week’s major Chinese data.

AUD/USD rose 66 pips higher (+0.85%) to .7881 and AUD/JPY jumped by 73 pips (+0.78%) to 94.36 while GBP/AUD fell by a whopping 102 pips (-54%) to 1.8975.

Dollar bears also went back in the game yesterday. Profit-taking from Fed rate hike expectations helped pull USD/JPY 5 pips lower (-0.04%) to 119.73, GBP/USD 44 pips higher (+30%) to 1.4953, and USD/CHF 66 pips lower (-0.63%) lower to .9662.

Another currency of note was the euro, which found support on the back of Draghi reassuring investors that the ECB’s QE program is on track. If you recall, market players are concerned that the central bank won’t have enough qualified bonds to buy for its program.

EUR/USD closed 50 pips higher (+0.46%) to 1.0946, EUR/JPY saw a 55-pip rise (+0.41%) to 131.05 while EUR/GBP also inched 12 pips higher (+0.16%) to .7320.

The rest of the major comdolls also had a good trading session with a recovery in oil prices supporting the Loonie and Fonterra reaffirming its dairy prices helping the Kiwi.

USD/CAD slipped by 16 pips (-0.13%) to 1.2523 while NZD/USD shot up by 26 pips (+0.34%) to .7653.

Today’s a big day for Asian session forex traders, as China is set to release its HSBC flash manufacturing PMI at 1:45 am GMT, followed by the CB leading index report at 2:00 am GMT.

Analysts are expecting a 50.5 read (vs. 50.7 previous) for the HSBC report. If the report prints higher than market expectations and there’s no other major catalyst throughout the session, then we might see risk appetite gain momentum over the next couple of hours.

Good luck and good trading!

See also:

London Session Recap

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