- US ADP report: 185K vs. 215K expected, 229K previous
- US trade deficit widens from 40.9B USD to 43.8B USD vs. 43.0B USD deficit expected
- CA trade deficit narrows down from 3.4B CAD to 0.5B CAD vs. 2.9B CAD deficit expected
- US ISM non-manufacturing PMI hits a 10-YEAR HIGH at 60.3
- Oil prices take another hit
- Australia’s employment numbers on tap
Dollar bulls unite! Thanks to strong reports from the U.S., forex traders once again had a field day buying the dollar. Which reports did it for them this time?
If you haven’t seen the headlines yet, it was the ISM non-manufacturing PMI report that did the trick for the dollar bulls. For starters, the headline figure shot up to 60.3, a 10-YEAR HIGH for the data. Then, the employment index, a closely-watched figure related to the NFP report, rose from 52.7 to 59.6, its fastest increase on record.
Talk about sending a message! Remember that the Fed is watching employment numbers closely for the timing of their first interest rate hike this year. Not surprisingly, the unambiguously positive jobs report overshadowed expectation misses in the ADP and U.S. trade balance report and boosted the Greenback across the board anyway.
USD/JPY broke above a solid resistance at 124.50 and ended the session 59 pips higher (+0.48%) to 124.87 while GBP/USD slipped by 29 pips (-0.19%) to 1.5600 and USD/CHF inched 5 pips higher (+0.05%) to .9790.
The Loonie was also under the spotlight, and not just because Canada printed its trade balance data. While the report showed trade deficit narrowing down in June, forex traders were more focused on oil price movements.
WTI crude futures fell by almost 2.0% and dropped below the $45 mark, something it hasn’t done since March. Meanwhile, Brent crude oil prices settled at $45.15 per barrel, a six-month low for the commodity. Yikes!
USD/CAD climbed from its post-Canadian data low and capped the session back to the 1.3187 area while CAD/JPY trimmed its gains and dropped back down from an intraday high of 95.02 to 94.69. Even EUR/CAD, which fell to an intraday low of 1.4283, zoomed back up to close at 1.4380.
Let’s see if today’s reports give Asian session forex traders more incentives to buy the low-yielding Greenback. Up ahead at 1:30 am GMT is Australia’s employment report. Analysts are estimating the unemployment rate going up from 6.0% to 6.1% while a net of 10,000 workers is expected to have found work.
Forex Gump recently pointed out the potential impact of the report on the Aussie’s intraday price action, so you might want to keep close tabs on this one. Any significant surprise just might influence risk appetite!
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