New York Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jul 04 08 01:02 GMT |


What started as a potential continuation lower in the USD, ended with a rally against most major currencies. The European Central Bank raised rates as expected but played down further rate increases. The US employment data came in worse than expected at -62,000 in May but US stocks rallied. The resiliency in US stocks further helped to give the USD a bid. EUR/USD sold off by nearly 200 points to below 1.5700 while USD/JPY rallied to settle below 107.00. JPY crosses were sharply lower as well and the relationship between those pairs and risk aversion seems to have disconnected for now.

Commodities were mixed today as oil traded higher but gold was sharply lower. The link between commodities and the USD is typically negative and it seems for now the market is more closely following the gold market.

Looking forward, today's data should have been broadly USD negative but it looks like the market has already discounted the news. If we see continued consolidation in the USD, look for another follow through move higher. Tomorrow is a holiday in the US but currency markets remain open until 5pm ET. Happy Holidays for those celebrating Independence Day.

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