Forex news for US trading 6 April 2015:
- March ISM non-manufacturing index 56.5 vs 56.5 prior
- Markit Services PMI 59.2 vs 56.9 estimate
- Canada Ivey PMI for March 47.9 vs 49.9 estimate
- Fed's Dudley: Liftoff timing will depend on how economy evolves
- Dudley: Dollar appreciation is a shock
- BOC Q1 business outlook survey future sales 4.0 vs 0.0 exp
- Gold up $12 to $1214
- WTI crude up $2.81 to $51.95
- S&P 500 up 14 points to 2080
- CAD and USD lead, CHF and NZD lag
Reports of the dollar-bull market's death may have been exaggerated. Better sentiment started in stocks then spread to bonds and eventually to the US dollar as stops were taken out late in the day and the dollar recovered most of its NFP losses.
Three-day charts are instructive at the moment. The dollar drops on NFP, moves sideways and then recovers in US trading. EUR/USD was near the highs as US trading got underway but it couldn't take out the late-March top at 1.1051 and profit taking turned into outright selling and it was a quick move down to 1.0916 as stops broke below 1.0975.
It was more of a grind that a cascade in USD/JPY as it slowly climbed from 119.00 to 119.70 before some late selling pushed it back down to 119.50. The ISM services data was a reminder that the economy is still solid and that was all the dollar needed.
Cable followed the pattern. tried to crack 1.50 with European trading winding down but it couldn't get there and then the selling slowly crept in. After falling it fell below 1.4925, the bulls finally gave up and it was a quick drop to 1.4875. There's still some space before the pre-NFP level of 1.4830 but London wasn't fully ramped up today.
USD/CAD didn't get quite the boost you might expect from oil. That might be owing to holidays and flows. A nearly 6% jump in oil prices is certainly good news for Canada, even if there was plenty of chatter today about the BOC eventually bringing rates to zero.
AUD/USD is the focus now. It crept up to 0.7668 in what looked like some short covering ahead of the RBA. That likely continued but it was swamped by the broader US dollar move and erased the early move in a solid slide down to 0.7580.
