31 August 2016 at 23:09 GMT
- Japan: Foreign Investment 2330 GMT
US data released
- ADP Employment Change – August (Actual 177,000 vs. forecast 175,000)
- Chicago PMI – August (Actual 51.5 vs. forecast 54.0)
- Pending Home Sales – July (1.3% vs. forecast 0.6%, m/m)
- EIA Crude Stocks Change – August 26 (Actual 2.27 m/b vs forecast 0.921 m/b)
The New Zealand dollar was the only G10 currency to end August on a positive note. All the others were in the red. Today, month-end rebalancing flows and ever-so-slightly better ADP Employment report had New York traders buying dollars in the morning. The ADP reaction was a bit of a head scratcher since it was pretty close to expectations and is usually a poor barometer for the nonfarm payrolls result.
The soft Chicago PMI data led to the afternoon US dollar retreat. EURUSD started the day at 1.1150 and bottomed out at 1.1121, just after the ADP data. It then drifted back up to 1.1160 by lunch and traded sideways until the Asia hand-off. USDJPY rallied from the opening, retreated into the lunch hour and then rebounded to close at the session high. GBPUSD sank with the ADP data and then recouped almost all those losses by day's end.
Oil prices declined when the Energy Information Administration reported a larger-than-expected build in US crude inventories. WTI dropped from $46.06 to $44.47.
US equity traders were less than enamoured by the falling oil prices and they sold stocks, enough so that the three major indices closed in the red. For the month, the Dow declined 0.2%, S&P 500 was down 0.1% while the Nasdaq rose 0.1%.
US equity traders were less than enamoured by the falling oil prices and the
three major indices closed in the red. Photo: iStock
– Edited by Gayle Bryant
Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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