Daily FX Trading Update: US ISM Non-Manu PMI Posts Stellar Gain

The Greenback was able to squeeze out more gains after US data came in mostly upbeat. The ISM non-manufacturing PMI jumped from 51.4 to 57.1, higher than the consensus at 53.1, and indicated a strong gain in its jobs component. However, the ADP non-farm employment change figure came in at 154K only, short of the estimated 166K figure and the previous 175K increase. Factory orders surprised with a 0.2% uptick instead of the estimated 0.4% drop. US initial jobless claims and Challenger job cuts are due today.
The euro struggled to hold on to its recent gains after ECB officials downplayed the idea of tapering. Data was somewhat weaker than expected as services PMI readings from Spain and France came in below consensus. German factory orders data is due today, along with the minutes of the latest ECB meeting.
The pound was still one of the weakest performers for the day, even as the UK services PMI showed a smaller than expected fall from 52.9 to 52.6 versus the projected drop to 52.1. There are no major reports due from the UK economy today, which might give bears time to book profits or keep Brexit jitters in play.
The franc advanced to the dollar but sold off sharply against the euro in what some speculate to be a form of mild intervention from the SNB. There were no reports out of the Swiss economy yesterday while today has the CPI due. Analysts are expecting to see a 0.2% rebound in price levels.
The yen continued to sell off against its peers as bulls appear to be reducing their holdings and transferring to the dollar instead. There were no major reports out of Japan yesterday and none are due today so risk sentiment could still be the main driving force for yen pairs.
Commodity Currencies (AUD, NZD, CAD)
The Kiwi and Aussie were somewhat weaker for the day while the Loonie got a boost from the rally in crude oil. The US EIA reported a draw of 3.3 million barrels from crude oil stockpiles, marking its fifth weekly drop in a row and easing fears of an oversupply. Australia’s trade balance beat expectations by printing a smaller deficit as both imports and exports rose. There are no other reports due from the comdolls today.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.