- US pending home sales: -1.8% vs. 0.9% expected, 0.6% previous
- US EIA crude oil inventories: -4.2M vs. -0.1M expected, 2.5M previous
- Fed keeps rates unchanged, no hints on when a rate hike is due
- RBA Governor Stevens to speak in Sydney
- AU building approvals, import prices on tap
The dollar gained a couple more pips against its forex counterparts despite a less hawkish-than-expected statement from the Fed. What’s in it anyway?
The biggest story of the hour is the Fed’s latest monetary policy decision. Market players were expecting the central bank to keep its interest rates unchanged and maybe give a few hints on when we can finally see a rate hike this year.
Janet Yellen and her friends did end up keeping its rates unchanged though it disappointed in the “giving of hints” part of the market expectation. Instead, they’ve clued in that we’ll likely see a rate hike when there’s “further improvement in the labor market” and the Fed is confident that “inflation will move back to its 2% objective over the medium term.” Talk about giving mixed signals!
The lack of guidance didn’t seem to faze the Greenback bulls. EUR/USD ended the fell from its 1.1000 support and capped the session 53 pips (-0.48%) lower than its open price. USD/JPY also popped up by 26 pips (+0.21%) to 123.97 and USD/CHF inched 46 pips (+0.48%) higher to .9680. GBP/USD, which was still reeling from a better-than-expected mortgage approvals report, popped up to an intraday high of 1.5690 before settling 38 pips lower (-0.24%) than its open price at 1.5606.
The comdolls also lost a couple to the Greenback though they put up a good fight. A shadow of doubt on the Fed’s tightening schedule was enough to boost gold prices higher while an inventory report lifted up oil prices.
For forex newbies out there, currencies such as the Australian, Candian, and New Zealand dollar tend to respond to commodity prices because their respective countries are big commodity exporters.
AUD/USD only lost 17 pips (-0.23%) while USD/CAD fell to an intraday low of 1.2872 before closing back up to 1.2945. Lastly, NZD/USD only gave up 5 pips (-0.08%) to .6671.
Aside from pricing in yesterday’s FOMC statement, Asian session forex traders also have a couple of Australian reports to pay attention to. The first salvo will come from none other than RBA Governor Stevens himself, who is scheduled to speak in Sydney during the Asian session. With Wheeler’s speech affecting the Kiwi’s price action as much as it did yesterday, it’s not a far cry to expect Steven’s speech to possibly have an impact on the Aussie today.
Next up is Australia’s building approvals and quarterly import prices due at 1:30 am GMT. Market players are expecting a 1.0% uptick on the former (from 2.4% previous growth) and a 1.5% increase in the latter (up from a -0.2% decline), but it’s likely that traders will pay more attention to what Stevens has to say.
Keep your eyes glued to the tube for any market-moving news, aight?
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!