Forex news for April 1, 2015 US edition:

  • US March ADP employment 189K vs 225K expected
  • March ISM manufacturing index 51.5 vs 52.5 exp
  • ISM's Holcomb says impact of strong dollar to take time
  • Markit final US manufacturing PMI 55.7 vs 55.3 exp
  • US Feb construction spending -0.1% vs -0.1% expected
  • US EIA crude oil inventories 4766K vs 4181K expected
  • RBC Canadian manufacturing PMI 48.9 vs 48.7 prior
  • Greek government bets big on tax evasion crackdown in latest proposal
  • Russian economy expanded 0.4% in Q4 vs 0.0% estimate
  • Bill Gross takes a swipe at the Fed, bets on low volatility
  • New Zealand dollar falls on soft dairy auction
  • Italian March deficit grows in March but lower YTD
  • ECB raises emergency funding cap for Greek banks by €700 million - RTRS
  • Gold up $21 to $1204
  • S&P 500 down 8 points to 2060
  • US 10-year yields down 7 bps to 1.855%
  • WTI crude up $2.06 to $49.65
  • CFH leads, NZD lags

It wasn't the start to the second quarter that US dollar bulls were hoping for. Economic data on jobs and manufacturing both missed estimates and the US dollar came under broad pressure. USD/JPY fell to 119.80 from 120.15 on ADP then fell to 119.43 after ISM helped to send stocks deep into the red. The Asia-Pac low of 119.42 held and the pair formed a minor double bottom to rebound to 119.77.

USDJPY in US trading

The euro was less sensitive to the news. It battled higher on the headlines but repeatedly ran into sellers in the 1.0775/1.0800 range and slipped back lower. The Greek headlines about skipping out on the IMF payment set a small shudder through the market but it read like more of an opinion or threat than a promise.

Speaking of threats, the Iran nuclear threat was in the headlines. The Swiss are punctual but that doesn't include negotiations in Switzerland as they extended to a second day beyond the 'deadline'. They still appear to be making progress but the day ahead could be dicey. That added a bid to oil but the bigger boost came from the first sign of slowing US production in the EIA report.

Oil pulled down USD/CAD as low as 1.2577 before the inevitable dip buyers arrived. I wrote about the reasons for buying USD/CAD despite the turnaround yesterday. The US dollar recovered late and so did the pair, finishing near 1.2626 but still well below the 1.2680 level at the start of US trading.

Cable had stumbled badly in European trading, falling more than a cent to 1.4745 but it nearly completed the roundtrip. UK traders may be overly worried about elections results and in the US, they appear happy to remind that no matter how the election turns out, the UK will probably be just fine. Last at 1.4822.

The kiwi dropped on the Fonterra auction but the surprise was how quickly the bidders arrived. It was a 20 pip drop to the downside that was followed by a 70 point rally. It was a strange time for kiwi bulls to hit the bid. Last at 0.7452 on a late sag with chatter about Fonterra lowering its forecast.