01 August 2017 at 23:28 GMT
- New Zealand: Employment Report 1845 GMT
- Australia: Building Permits 2130 GMT
US data released
- Personal Income/Expenditures Price Index--June (Actual 1.4% v s. forecast 1.3%, y/y)
- ISM Manufacturing PMI-June (Actual 56.3 vs forecast 56.5))
- Constructions Spending-June (Actual -1.3% vs. forecast -0.4%)
- API Weekly Crude Stocks change (Actual 1.79 million barrels vs. previous -10.22 m//b)
The greenback started the New York session trying to push back against persistent selling. For today, it was successful. The US dollar drifted modestly higher against the euro, Sterling and the Swiss franc, while had more success against the commodity currency bloc.
This morning’s US economic data was on the soft side, but that didn’t lead to much US dollar selling largely because it will all have been forgotten by the time the next Federal Open Market Committee meeting rolls around. The ISM Manufacturing PMI came out a little worse than had been forecast, which may have been payback from the 2.8% gain in May.
EURUSD traded in a 1.1786-1.1835 band. It was sneaking down to the start the day and although it finished lower than where it opened, it still closed at 1.1800.
Sterling is still in nose-bleed territory. GBPUSD traded in a 1.3198-1.3242 range and although it closed below the day’s high, traders don’t appear too concerned about the upcoming “Super Thursday” risk.
USDJPY was lively. It dropped from ¥110.53 to ¥109.92 after the weaker than expected ISM Manufacturing PMI. That move quickly reversed and USDJPY rallied to close unchanged on the day.
NZDUSD was enjoying a morning rally, rising from 0.7463 to 0.7492 when the Global Dairy Trade auction results were announced. The 1.6% drop in prices drove NZDUSD to 0.7465 and the pair spent the rest of the day in 0.7465-0.7485 range. AUDUSD traded in a similar fashion. USDCAD was bid from the open rising from 1.2455 to 1.2537 at the close on the back of what appeared to be a large order, and due to falling oil prices.
WTI oil dropped 2.0% today on a Reuters report that Opec production rose in July. Pouring salt on the wound was the increase in US crude inventories reported by the American Petroleum Association at the end of the day.
Wall Street started the month with gains. The Dow Jones Industrial Average came within spitting distance of 22,000 around the lunch hour, but eased off into the close. Apple (Aapl: Nasdaq) rose 5.33% in after-hours trading after Q3 earnings beat expectations.
NZDUSD retreated following the news of a 1.6% drop in prices at the Global Dairy Trade auction. Photo: Shutterstock
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– Edited by Robert Ryan
Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.