Article Highlights

  • US initial jobless claims: 275K as expected vs. 281K previous
  • US import price index: -1.8% vs. -1.6% expected, -0.9% previous
  • US wholesale inventories: -0.1% vs. 0.3% expected, 0.7% previous
  • CA new house price index: 0.1% vs. 0.2% expected, 0.3% previous
  • CA capacity utilization: 81.3% vs. 81.7% expected, 82.6% previous
  • NZ BSI manufacturing index: 56 vs. 43.7 previous
  • NZ food price index: -0.5% vs. 0.6% previous
  • Dollar down, commodities and high-yielding currencies up
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Dollar-selling was the name of the game during the U.S. session, as forex traders square off most of their long dollar trades ahead of next week’s FOMC decision.

The dollar started the trading session on a weak note as Uncle Sam’s import prices came out better-than-expected. The report doesn’t usually cause much impact, but it seems that market players were looking for any catalyst to close their dollar trades as the weekend approaches. Unless you’ve been living under a rock, you should know that the Fed is set to decide on its interest rates next week and so far there’s no market consensus on whether or not it would pull the trigger this month.

EUR/USD, one of the most popular dollar pairs, shot up by 83 pips (+0.74%) to 1.1280 while GBP/USD also rocketed by 58 pips (+0.38%) to 1.5451. The dollar didn’t have better luck against the low-yielding currencies with USD/JPY slipping by 46 pips (-0.38%) to 120.60 and USD/CHF inching 30 pips lower (-0.31%) to .9734.

It might have also helped risk appetite that commodities like gold and oil prices ended the day in the green. Gold rebounded from its one-month low to settle 0.7% higher at $1,109.30 per ounce while U.S. crude oil prices jumped by 4.0% to $45.93 per barrel.

This, along with Australia’s better-than-expected employment numbers earlier in the day, is probably why AUD/USD closed 9 pips higher (+0.13%) to .7070 while USD/CAD dropped by 29 pips (-0.22%) to 1.3228. Meanwhile, NZD/USD also inched 5 pips higher (+0.08%) to .6298.

Asian session forex traders don’t have a lot on their plate with only Japan’s BSI manufacturing index on tap at 11:50 pm GMT. Instead, market players can focus on end-of-week flows and today’s U.S. reports for direction and possible continuation or reversal of yesterday’s dollar weakness.

Good luck!

See also:

London Session Recap

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