Article Highlights

  • U.S. initial jobless claims at 262K vs. 269K consensus
  • Philly Fed index up from -2.9 to +2.0 vs. +1.4 forecast
  • U.S. CB leading index up from 0.3% to 0.4% forecast in July
  • Fed official Williams: Should hike rates sooner rather than later
  • Williams: September hike could be a possibility
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The Greenback had trouble recovering from its post-FOMC minutes hangover, as the lack of hawkishness continued to weigh on the currency.

Major Events:

Upbeat economic data Medium-tier data from the U.S. economy all came in the green, but market participants seemed to doubt that this could change the FOMC’s mind about a September hike.

Initial jobless claims inched lower from 266K the other week to 262K last week, lower than the estimated 269K figure. The Philly Fed index showed a comeback from -2.9 to +2.0, reflecting a return to industry expansion and beating the consensus at +1.4. Lastly, the July CB leading index posted a 0.4% uptick, up from the earlier 0.3% reading.

Speeches by Fed officials – San Francisco Fed Chairman John Williams stepped up to the podium to share his own views on the economy and monetary policy, citing that he thinks the Fed should hike rates sooner rather than later. He added that a September hike could still be in play since this could prevent the economy from overheating.

FOMC member Dudley grabbed the mic once again to reiterate his comments from his earlier speech, highlighting the strength in the jobs market in saying that they shouldn’t worry too much about a U.S. slowdown. But since most forex junkies have already read what the rest of the FOMC has to say, these hawkish remarks failed to stoke dollar gains like it did so yesterday.

Major Currency Movers:

USD – The U.S. dollar kept sliding lower against its counterparts, as dollar traders are factoring in lower odds of another Fed rate hike in the near term.

EUR/USD edged higher from 1.1309 to 1.1361 (+0.46%), USD/JPY dipped below the 100.00 mark once more from 100.30 (-0.31%), GBP/USD climbed from 1.3135 to a high of 1.3182 (+0.36%), and USD/CHF crawled down from .9586 to .9535 (-0.53%).

Watch Out For:

  • 4:00 am GMT: New Zealand credit card spending y/y
  • 5:30 am GMT: Japan all industries activity (+0.9% expected, -1.0% previous)

See also:

Asian Session Recap

London Session Recap

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