- US final quarterly GDP: -0.2% as expected vs. -0.7% previous
- US final core PCE price index unchanged at 0.8%
- Tsipras: creditors rejected Greece’s latest proposal
- Commodities, U.S. equities down on risk aversion
Risk aversion was the name of the game during the U.S. session, as forex traders reacted to developments in Greece and equities price action.
The main story of the hour was Greek creditors rejecting Tsipras’ latest proposal. If you remember, a “leaked” report revealed that the document included new taxes on the businesses, the rich, and added VAT on some items.
The risk aversion that started during the London session extended to early U.S. session trading. It also helped that U.S. Treasury yields ticked higher and that Uncle Sam’s final GDP reading came in as expected and is a bit better than the previous quarter’s 0.7% slide.
Luckily for higher-yielding currencies, the bears took a breather just after the London session close and we saw some shallow recoveries in the major currency pairs.
EUR/USD ended the session with a 19-pip loss (-0.17%) to 1.1196 after dipping to a session low of 1.1169 while GBP/USD dropped by 62 pips (-0.39%) to 1.5697 after hitting a low of 1.5668. Meanwhile, USD/CHF climbed by 25 pips (+0.27%) to .9341 after reaching an intraday high of .9369.
Overall risk aversion also weighed on commodity prices, with gold dipping by $4 to $1174 and WTI crude oil prices also down by $0.75 to $60.25. This is probably why AUD/USD dropped by 38 pips (-0.49%) to .7705 and USD/CAD popped up by 91 pips (+0.74%) to 1.2399.
It was the yen bulls that continued to party in the pip streets when the major dollar pairs were showing slight recoveries. USD/JPY did an about face from its 124.38 intraday high and closed at 123.87 while GBP/JPY ended the session 82 pips lower (-0.42%) at 194.43 and AUD/JPY closed with a 51-pip loss (-0.53%) at 95.44.
Will risk aversion dictate Asian session forex trading? We don’t have any major reports on the docket, so keep an eye out for other news reports that might affect forex price action. Also, pay close attention to weekly inflection points and possible continuation or small retracements from yesterday’s moves.
Good luck and good trading!
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