New York Session Recap

Daily Forex Fundamentals | Written by Forex.com | Aug 14 08 20:56 GMT |
New York Session Recap

The turn lower in oil prices coupled with a stock market rally led the USD higher in the NY session. Oil dropped $1.25 in NY trading and closed near $114.90/bbl after trading as low as $112.75/bbl. US equities rose 0.6% in broad terms as financials rebounded 2.6% after posting two days of sharp losses.

There were also some important US economic reports out in the form of July consumer prices and weekly initial jobless claims. Headline CPI jumped a higher than expected 0.8%, taking the annual rate to a whopping 5.6% from 5.0% previously. The guts of the report showed broad-based gains in prices, though the recent falloff in oil led many in the market to discount this report as "old news".

Jobless claims, meanwhile, fell to 450K from 460K the prior week. Though the print seems high on the face of it, one has to remember that this number is not adjusted for labor force growth. The latest numbers have also been propped up by recent legislation that extended unemployment benefits to those who would have otherwise dropped off the tally, so in reality they are somewhat lower.

The FX market shrugged off the economic reports and focused on the goings on in oil and stocks instead. EURUSD was sold from an open near 1.4905 to a close near the 1.4815 mark. AUDUSD lost ground on the decline in commodities and slipped from an open near 0.8760 to close around the 0.8710 area.

Lower oil also boosted USDCAD modestly towards a close near 1.0640 after opening near 1.0615. USDJPY, however, traded practically sideways all session to a 109.70 close, as lower US yields (-5 bps) offset the positive impact from higher stock prices.

Upcoming Economic Data Releases (Asia Session) Prior Estimate

* 8/14/2008 22:45 GMT NZ Retail Sales (MoM) JUN -1.2% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex-Auto (MoM) JUN 0.7% - -
* 8/14/2008 22:45 GMT NZ Retail Sales Ex Inflation (QoQ) 2Q -1.2% - -

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