Forex headlines for September 5, 2013:
- Dovish Draghi thumps the euro
- August US ISM non-manufacturing PMI 58.6 vs 55.0 exp
- ISM employment component highest since Feb
- US Initial jobless claims 323k vs 330k exp
- August US ADP jobs report 176k vs 180k exp
- ECB sees 2013 GDP at -0.4% vs -0.6% previously; 2014 at +1.0% vs +1.1% previously
- August US challenger job cuts up 56.5% from 2.3% prior yoy
- July US factory orders -2.4% vs -3.3% exp
- Fed’s Kocherlakota: A reduction in Fed bond buying may not mean as much as people might think
- US 10-year yields touch 2.99% in global rout
- Gold down $22 to $1369
- S&P 500 up 0.1% to 1655
- USD leads, CHF lags
The dominoes fell today. USD/JPY broke 100, EUR/USD broke the 200-day moving average and USD/CHF broke the August highs. Economists are hurriedly changing their estimates for non-farm payrolls with the latest guesses around 190K.
The takeaway from Draghi was concern about Fed tapering. He said the ECB discussed a rate hike and cited higher yields as a reason. The overall tone was negative and from high-to-low EUR/USD fell more than 100 pips. I expected to see some consolidation after Europe closed but it’s been sideways around 1.3220 in a tight range.
USD/JPY took out 100.00 several times and continues to make higher highs but can’t breakout. The high on the day was 100.20.
Gold took a beating as the taper trade ramped up on economic data. A strong NFP will add to the pain.
