Forex news for March 2, 2015 US edition:
- February 2015 US ISM manufacturing PMI 52.9 vs 53.0 exp
- January 2015 US personal income 0.3% vs 0.4% exp m/m
- US January PCE core +1.3% y/y vs +1.3% y/y expected
- January 2015 US construction spending -1.1% vs 0.3% exp m/m
- February 2015 Canadian RBC manufacturing PMI 48.7 vs 51.0 prior
- February 2015 US Markit manufacturing PMI final 55.1 vs 54.3 exp
- Q4 2014 Canadian current account balance -13.92 vs -12.50bn exp
- Bundesbank's Dombret says we need to rethink assumption that government bank loans are risk free
- ONS revises down UK GDP
- Philly Fed names Patrick Harker to replace Plosser
- Bill Gross weighs in on the global currency war
- Greece could get third bailout of €30-50bn says Spain's de Guindos, gets denied by EU spokeswoman
- First quarter US GDP estimates lowered after data
- Italian Feb deficit plunges
- S&P 500 up 13 points to 2117
- Gold down $6 to $1207
- WTI crude flat at $49.83
- USD leads, NZD lags
It's clear that 53.0 wasn't the true expectation for the ISM manufacturing index. The US dollar jumped despite the soft reading as soft internals. Earlier weak PMIs, especially the Chicago PMI, had traders pricing in something worse so there was a relief rally.
At the same time, USD/JPY punched through resistance at 119.84 on the headlines and then squeezed through 120.00 to give the dollar a broad bid.
The euro joined in the USD move. In Europe, EUR/USD climbed 60 pips to 1.1240 but it gave all the gains back in US trading and finishes marginally lower on the day.
The bigger loser was cable. It stalled last week just ahead of the 2015 high and is continuing lower in a retracement phase, especially after the ONS downgraded GDP. So far support at 1.5350 is holding.
The Canadian dollar was bounce around by oil, as usual, but the RBC manufacturing PMI fell to a series low and that added to the general USD rally. The combination boosted the pair to 1.2565 from 1.2500 before slipping back to 1.2535.
The Australian dollar was on the defensive ahead of the RBA. JPMorgan switched its call to a cut and evidently so did many traders as the Aussie struggles despite stimulus from China. The kiwi was also weak.
