Article Highlights

  • US headline CPI: 0.1% as expected vs. 0.2% previous
  • US core CPI: 0.3% vs. 0.2% expected and previous
  • CA CPI: -0.1% vs. 0.1% expected, 0.7% previous
  • CA core CPI: 0.1% as expected vs. 0.6% previous
  • CA retail sales: 0.7% vs. 0.3% expected, 1.5% previous
  • CA core retail sales: 0.5% vs. 0.4% expected, 1.8% previous
  • Yellen: rate hike possible “at some point this year”
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Up, up, and away! The Greenback clobbered its counterparts, as forex traders priced in strong U.S. reports and a hawkish statement from the Fed.

The dollar started the U.S. session strong after Uncle Sam printed a better-than-expected CPI report. Though the headline figure came in at an expected 0.1%, the core figure fired up the currency bulls with its 0.3% uptick when analysts had only been expecting a 0.1% growth.

Janet Yellen’s speech also helped boost the Greenback. In her statement, she said that “it will be appropriate some time this year” to begin normalizing rates. However, she also cautioned that the Fed would need to see more improvement in the labor market and inflation on a steadier path to 2.0% before taking steps to hike rates.

The strong reports and Yellen’s hawkishness were enough to spur on the forex bulls. EUR/USD dropped by 156 pips (-1.40%) to 1.1008 while GBP/USD also fell dramatically and registered a 157-pip drop (-1.00%) to 1.5476.

The dollar also logged in pips against its low-yielding counterparts with USD/JPY jumping by 62 pips (+0.51%) to 121.54 while USD/CHF also rocketed by 108 pips (+1.16%) to .9441.

Even the comdolls were no match for the Greenback’s game last Friday. AUD/USD dropped by 75 pips (-0.95%) to an intraday low of .7811 before closing at .7818 while NZD/USD also saw a 55-pip decline (-0.75%) to .7308.

The Loonie was also a currency under the spotlight with Canada printing its inflation and retail sales numbers. A much stronger-than-expected retail sales report could’ve countered a slight miss in inflation numbers, but not when you also factor another dip in oil prices on the same day.

USD/CAD popped up by 101 pips (+0.83%) to 1.2301 where it encountered intraday resistance, while CAD/JPY slipped by 31 pips (-0.31%) to 98.81.

Let’s see if Asian session forex traders extend the dollar’s rally. Only Japan’s trade balance report (which showed strong numbers) and the BOJ monthly report at 5:00 am GMT are the events to watch until the London session starts. And with most of Europe out on a bank holiday later, it’s likely that equities moves will have more influence on the Asian currencies today. Keep an eye out for any news that might affect risk-taking, aight?

Good luck!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!