New York Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jul 09 08 01:04 GMT |


The greenback was bid in NY trading as the rally in US stocks, sharply lower oil prices, and some more hawkish rhetoric out of the Fed helped the buck extend gains. US stocks rallied with the S&P 500 up nearly 2% on the day after the market was comforted by comments from Fed Chairman Bernanke who noted that liquidity will be available to banks into 2009 and comments from Treasury Secretary Paulson who said that GSE legislation is key to boosting mortgage market confidence. Oil plunged roughly $3.50 in the session to just under $136/bbl, to boot.

Richmond Fed President Lacker offered up some USD positive musings in the NY session as well. The super hawk did not disappoint, noting that 'just as easing policy in response to emerging downside risks made sense, withdrawing some of that stimulus as those risks diminish makes eminent sense as well'. In contrast to Yellen's comments yesterday, Lacker is clearly in the rate hike camp. His comments offered support for the USD in the sense that they were mostly as expected. The buck would have likely sold off on dovish comments as it would seem the Fed's inflation fighting credentials were dissipating.

EUR/USD opened the session near 1.5695 and was sitting near the 1.5670 mark at the close. Meanwhile, the rally in US stocks helped prop up USD/JPY which jumped to a close near 107.50 after starting NY trading near the 106.80 level. However the pair closed below the 200-day moving average once again, which is something we would likely need to see before we can move definitively higher.

In the upcoming Asia Session we will see some potentially market moving data. UK nationwide consumer confidence is due up at 2300GMT and the market expects a pullback in June to 65 from last month's 69 result. Japanese machine orders are also on tap with a 1.1% increase expected in May -- watch for JPY selling if we get a negative number here. Last but not least, we will see Australian consumer confidence and while there is no consensus estimate, deterioration from the prior month should see AUD lower.

Upcoming Economic Data Releases (Asia Session) Prior Estimate

* 7/8 23:01 UK Nationwide Consumer Confidence JUN 69 - -
* 7/8 23:50 JN Machine Orders (MoM) MAY 5.5% 1.5%
* 7/8 23:50 JN Machine Orders YOY% MAY 0.5% -6.0%
* 7/9 0:30 AU Westpac Consumer Confidence JUL -5.6% - -
* 7/9 1:30 AU Home Loans MAY -3.0% - -
* 7/9 1:30 AU Investment Lending MAY 1.4% - -
* 7/9 1:30 AU Value of Loans MoM MAY - - - -

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