Article / 15 September 2016 at 22:22 GMT

US Market Wrap: Rate hawks buried under data dump

FX Consultant / IFXA Ltd


  • Nothing of note 

US Data released:

  • Retail Sales-August (Actual -0.3%, vs. forecast -0.1%, Ex-autos -0.1% vs forecast 0.2%, m/m) 
  • Current Account (Actual -19 billion vs. forecast -120.5bn) 
  • PPI-August (Actual 0.0% vs. forecast 0.1%, ex-food and energy 0.1% v. forecast 0.1%) 
  • Jobless claims (Actual 260,000 versus forecast 265,000) 
  • Philadelphia Fed Manufacturing Index Survey (12.8 vs. forecast 1.0) 
  • Industrial Production -August (Actual -0.4% vs forecast -0.3% m/m) 
  • Capacity Utilization-August (Actual 75.5% vs. forecast 75.7%) 
  • Business Inventories-July (Actual 0.0% vs. forecast 0.1%) 

The US dollar conceded ground against the G10 currencies in a choppy but low volume session. US dollar sellers won the day following a large data dump that, for many, eliminated any prospects for a September rate hike. The Atlanta Fed GDPNow indicator dropped to just 3.0% from the 3.3% reading on September 9. Meanwhile, the CME FEDWatch tool probability of a September rate hike is only 12%, down from 15% yesterday.

The commodity currency bloc led by NZDUSD were the best performing G10 currencies followed by the Japanese yen. EURUSD spiked to 1.1282 from 1.1255 immediately upon the release of the morning data, but quickly retreated and then traded sideways until the close.

USDJPY dropped to just ¥101.90, and then shot up to ¥102.74 after the data was released, before it finally traded lower throughout the rest of the day.

Crude oil price movements were erratic. WTI bounced between $43.74/barrel and $44.30/b, with traders confused by various reports of pipeline outages and reports of supply from Libya and Nigeria coming on board.

US equity indices followed the lead of the European bourses and rallied, powered by tech stocks. The perceived reduced risk of any Federal Open Market Committee policy action at next week’s meeting supported the move.

 There have been swings in oil prices, with traders confused by reports of pipeline outages and talk of supply from OPEC members Libya and Nigeria, above, coming on board. Photo: iStock


If you are upset at Bank of England governor Mark Carney's actions or lack thereof, then you shouldn't be, writes TradingFloor contributor, Stephen Pope in: Criticism of courageous Carney badly misplaced

For more on forex, click here.

– Edited by Robert Ryan

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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