Article / 02 June 2016 at 0:06 GMT

US Market Wrap: US dollar churns in choppy FX session

FX Trade Strategist /


  • Australia: AIG Performance of Manufacturing Index                 2330 GMT                                                                                      
US Data released:

  • Markit Manufacturing PMI -May (Actual 50.7 vs. previous 50.5)
  • ISM Manufacturing PMI-May (Actual 51.3 vs. forecast 50.4)
  • Construction Spending-April (Actual -1.8 vs. forecast 0.6)
  • API Weekly Crude Stock change (Actual 2.35 million barrels vs. previous 15.13 m/b

New York traders inherited a jittery FX market when they walked in. There was a whiff of risk aversion in the air stemming from the unimpressive China data overnight while Sterling was haemorrhaging on an unflattering Brexit poll. The GBPUSD plunge found a floor at 1.4385 and bounce half-hardheartedly to 1.4410 where it remained for the rest of the day.

USDJPY flirted with 109.00 but reversed course following the mostly good US data. EURUSD was choppy but resisted attempts to move lower and finished the day at the high. All in all, a fairly normal pre-nonfarm payrolls market.

NZDUSD turned a frown upside down following the Global Dairy Trade auction which posted a 3.4% gain in the price index. NZDUSD rose from 0.6787 to 0.6822 on the news.

Oil prices went for a walkabout. An early morning decline touched $47.75/barrel and then the losses were quickly erased as WTI staged an impressive rally back to $49.23/b.

Apparently, Opec members are floating the idea of a production cap at tomorrow’s meeting. Why institute production caps when mere rumours of such action achieves the desired result?

The end of day, API data took the slick off of WTI and prices declined to $48.90/b in after-hours trading.

US stockmarkets didn’t follow the lead of the Asia or European equity markets closed in the green, but just barely supported by the bump in the ISM manufacturing Index.

 The Kiwi dollar got a real boost from stronger dairy prices. Photo: iStock


Saxo Private Bank's Chief Investment Officer, Teis Knutthsen sums up the macro picture nicely in: Investment Outlook: When the lie is so big...

-- Edited by Adam Courtenay

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.


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