06 September 2016 at 23:00 GMT
- Australia: Second-quarter GDP 2130 GMT
US Data released:
- ISM Non-manufacturing PMI August (Actual 51.7 vs. forecast 55.0)
New York traders inherited a reasonably calm FX market to start the day. EURUSD was drifting within a narrow 1.1140-70 band, USDJPY was hovering above 103.20, while Sterling was edging higher.
That calm proved to be the eye of the hurricane. The greenback was blown away on a much weaker-than-expected ISM Non-Manufacturing Index print. EURUSD spiked to 1.1250, GBPUSD rallied from 1.3340 to 1.3442 and USDJPY sank to 102.02. The dollar never recovered and closed at the lows of the day.
The commodity currency bloc joined the party, led by NZDUSD gains. USDCAD losses were tempered, to a degree, by declining oil prices.
Oil prices have been on a roller-coaster ride since Monday and that ride did not end today. Opec and Russia oil price support stories have fueled the moves. Iran weighed in today. According to the Wall Street Journal, Iran’s oil minister, Bijan Zanganeh, said Opec wants to get prices higher than the current level but low enough not to encourage rivals to raise production. That story took WTI from a low of $43.81 to $44.92.
US equity traders bought stocks as a September rate hike started to fade following the recent bout of soft US data and encouraged by the rally in oil. The major indices closed in the green.
The commodity currency bloc joined the party, led by NZDUSD gains. Photo: iStock
Edited by Susan McDonald
Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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