- US consumer credit: 19.1B USD vs. 18.4B USD expected, 27.0B USD previous
- US NFIB small business index: 95.9 vs. 96.0 expected, 95.4 previous
- US labor market conditions: 2.1 vs. 1.8 previous
- UK BRC shop price index: -1.4% vs. -0.2% expected, -1.4% previous
- AU Westpac consumer sentiment, home loans data on tap
- Japan preliminary machine tools orders due today
Risk appetite was the name of the game during the U.S. session, as U.S. and Canadian traders came back hungry for risk after their Labor Day holiday.
There were no major reports released during the U.S. session, so it was easy for investors to load up on high-yielding investments after taking their Labor Day holidays earlier this week. The dollar ended up gaining a few pips on the yen and the franc, but lost pips to euro, pound, and the comdolls.
Uncle Sam did print a couple of reports including slightly better-than-expected labor market conditions and consumer sentiment data. But what caught forex investors’ attention more was the risk-friendly intraday trends that began in the earlier trading sessions.
For starters, the pound continued to tick higher on the back of M&A flows. Word around the hood is that Japan’s Mitsui Sumitomo Insurance has agreed to buy British insurer Amlin Plc at about 3.46 billion pounds ($5.31 billion). For forex newbies out there, you should note that the Japanese company would need a lot of pounds for the deal to go through.
This is probably why GBP/USD ended the day just below the 1.5400 psychological handle while GBP/JPY capped the day at 184.65 after slipping to a session low of 183.89.
The euro gained a couple on its counterparts despite the lack of major catalysts. Some market players point to Germany’s better-than-expected reports for the common currency’s strength, but some attribute the price action to overall risk-taking at the beginning of the week.
EUR/USD popped up by another 39 pips (+0.35%) to 1.1200 while EUR/JPY jumped by 43 pips (+0.32%) to 134.32 and EUR/GBP inched 28 pips higher (+0.39%) to .7274.
Last but not the least are the comdolls, which also got on the anti-dollar train on the back of stronger commodity prices and uncertainty over a possible Fed rate hike next week. Gold prices broke its four-day losing streak with a 0.2% increase to $1,121.08 per ounce while Brent crude oil prices rocketed by 4% on a good trading day for both European and U.S. markets.
AUD/USD popped up by 45 pips (+0.65%) to .7027 while USD/CAD dropped by 27 pips (-0.20%) to 1.3206. NZD/USD, which also found support from mixed Chinese trade data, flew by 60 pips (+0.95%) to .6351.
Will Asian session forex traders show more love for the dollar? They don’t have much on their plate with only Australia’s Westpac consumer sentiment report and Japan’s preliminary machine tools orders reports on tap. These reports don’t usually cause sustained moves for their respective currencies, so y’all better watch out for their possible impact on risk appetite!
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