- U.S. ISM manu PMI up from 48.2 to 49.5 vs. 48.5 forecast
- Canadian economy grew 0.2% in Dec vs. 0.1% estimate
- New Zealand dairy price index up by 1.4%, -2.8% previous
Risk on, baby! Stronger than expected economic data helped the higher-yielding currencies outpace their safe-haven forex peers in the past few hours.
U.S. ISM manufacturing PMI – The U.S. ISM manufacturing PMI for February came in at 49.5, up from the previous 48.2 figure and higher than the projected 48.5 reading. Even though the index still hasn’t indicated an expansion, the contraction has slowed down significantly.
Components of the report showed that the index for production rose from 50.2 to 52.8 while the index for employment climbed from 45.9 to 48.5. In fact, majority of the sub-indices showed improvements, except for supplier deliveries, customer inventories, and exports.
Strong Canadian GDP – Canada had its fair share of upbeat data, as its December GDP reading showed a 0.2% expansion versus the projected 0.1% growth figure. Manufacturing output was responsible for most of the gains while retail trade, mining, and oil and gas extraction showed declines.
Oil price rallies – Crude oil chalked up yet another winning day, thanks to positive updates from Russia. According to its oil minister, a deal to freeze output could be enough to stabilize the market, as companies are already in talks with the government to avoid tax hikes in exchange for curbing production.
WTI crude oil popped up to the $34/barrel level while Brent crude oil advanced to $36.71.barrel. Wondering why all this matters? Read Forex Gump’s Primer on Oil Prices here.
Major Currency Movers:
Commodity currencies – The comdoll gang was the biggest beneficiary of the risk-on flows in the forex market, as the Loonie led the pack thanks to oil price gains.
USD/CAD fell by more than a hundred pips to the 1.3385 area upon seeing upbeat GDP data and crude oil rallies, CAD/JPY popped up to a high of 85.27, EUR/CAD fell lower to the 1.4600 levels, and GBP/CAD resumed its slide to a low of 1.8674.
AUD/USD broke out of its consolidation around .7150 to a high of .7274, AUD/JPY is up to 82.50, NZD/USD landed above .6600 to a high of .6639, and NZD/JPY is making its way towards testing the resistance at 76.00.
JPY – On the flip side, the Japanese yen was the biggest loser in the forex arena, as traders switched their biases. USD/JPY rallied from the 113.00 area to a high of 114.18, EUR/JPY popped up to test the resistance at 124.00, and GBP/JPY climbed to a high of 139.53.
- 12:30 am GMT: Australia GDP q/q (0.5% expected, 0.9% previous). Check out Forex Gump’s Trading Guide!
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!