03 October 2016 at 21:48 GMT
US Data released:
- ISM Manufacturing PMI September (Actual 51.5 vs forecast 50.3)
- Markit Manufacturing PMI September (Actual 51.5 vs previous 51.4)
- Construction spending August (Actual -0.7% vs. 0.2%)
EURUSD continued to vie for the “dullest currency in the G10” award. It dipped below the 1.1220 European low following the release of the stronger than expected ISM Manufacturing PMI report, touched 1.1204 and spent the rest of the day in a 1.1204-1.1220 band.
USDJPY rallied on the ISM data, peaked at 101.64 and then traded sideways in a 101.48-64 band. GBPUSD extended the Asia/Europe sell-off to 1.2814 and then tried to rally. That move was brief and GBPUSD is hovering at 1.2835. The Australian and Canadian dollars squeaked out gains fueled by rising oil prices.
Oil prices started the day with a bid, which wasn’t sustained. WTI dropped to $47.82 from $48.74 on profit taking. That moved reversed when it was reported that Iran was urging non-Opec countries to help stabilise the market. For some reason, oil traders saw that as a positive development and rushed to buy crude. WTI climbed from $47.85 to $49.00. Iran has called for non-Opec countries to join Opec in supporting the market. There wasn’t any evidence that US shale producers rushed to comply with the request.
US equity indices opened lower and finished that way as well. Ongoing European bank stock concerns and hawkish comments from Cleveland Fed President Loretta Mester contributed to the move lower.
USDJPY rallied after the stronger than expected ISM Manufacturing PMI report to peak at 101.64. 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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