Daily FX Trading Update: BOC Kept Rates on Hold – Mar. 5, 2015

Daily FX Trading Update: BOC Kept Rates on Hold - Mar. 5, 2015

The US dollar continued to advance against most of its FX trading counterparts, despite mixed data from the US economy. The ADP non-farm employment change report showed a smaller than expected 212K increase versus the projected 219K gain, although the previous reading was upgraded. Meanwhile, the ISM non-manufacturing PMI improved from 56.7 to 56.9 instead of falling to the projected 56.5 figure. Initial jobless claims and US factory orders data are up for release later today.

The euro continued its slide against most of its FX trading rivals, as weak fundamentals weighed on the shared currency. Services PMI from Spain and Italy came in weaker than expected, causing the region’s final services PMI to fall from 53.9 to 53.7. Retail sales actually beat expectations with a 1.1% gain versus the projected 0.2% uptick. German factory orders data is up for release today but the bigger market mover for euro pairs would be the ECB rate statement.

FX Trading News

The pound gave up most of its recent FX trading gains to the dollar and the yen when the UK services PMI fell short of estimates. The reading dropped from 57.2 to 56.7, reflecting a slower industry expansion and potentially lower contribution to overall economic growth. Later today, the BOE will announce its interest rate decision and most likely keep monetary policy unchanged.

The franc continued to edge lower against the dollar but managed to recover a bit against the euro and the pound. There have been no reports released from the Swiss economy yesterday and none are due today, suggesting that the franc could be sensitive to risk flows.

The yen had a mixed FX trading performance, as it took advantage of the weakness among European currencies but failed to hold on to its gains against the comdolls. There have been no reports released from Japan yesterday, indicating that the yen was acting more as a counter currency. There are still no reports due from Japan today.

The Loonie drew strong support from a relatively upbeat BOC statement, as the Canadian central bank refrained from cutting interest rates and indicated that they might no longer need to ease again. Meanwhile, the Australian dollar was still in a weak spot since its GDP reading fell short of expectations with a mere 0.5% growth reading. Earlier today, Australian retail sales data came in line with consensus as it showed a 0.4% uptick. Canadian Ivey PMI is up for release later today and an improvement from 45.4 to 49.4 is eyed.

To contact the reporter of the story: James Brennan at james@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.