Daily FX Trading Update: EUR Surges After ECB Statement – June 4, 2015

Daily FX Trading Update: EUR Surges After ECB Statement - June 4, 2015

The US dollar had a tough time holding on to its FX trading gains yesterday and even gave up ground to the euro. Data from the US economy was mixed, with the ADP non-farm employment change coming in slightly above expectations and showing a 201K gain. However, the ISM non-manufacturing PMI fell short of consensus and showed the lowest employment index in four months, suggesting that the NFP reading might also come up short. For today, only the initial jobless claims and revised non-farm productivity data are up for release, as dollar pairs could consolidate ahead of the NFP.

The euro surged against its FX trading counterparts upon hearing that the ECB has no plans of either front-loading or tapering its QE program. Governor Draghi also mentioned that they might extend their program past September 2016 if the euro zone economy fails to meet their inflation targets then. Data from the euro zone was mostly stronger than expected, with significant gains in the jobs sector, allowing the euro to advance against its rivals. There are no major reports due from the euro zone today.

FX Trading News

The pound gave up ground in recent FX trading after the UK printed a weaker than expected services PMI. The reading slipped from 59.5 to 56.5, lower than the projected dip to 59.2. For today, the BOE interest rate decision is lined up and no actual monetary policy changes are expected. The pound’s reaction might also be limited as traders could wait for the minutes of the meeting to be released before placing larger positions.

The franc took its cue from the euro and advanced against its FX trading counterparts. There have been no reports out of the Swiss economy then and none are due today, indicating that the franc might keep following in the euro’s footsteps.

The yen regained a bit of ground to the dollar but was a big loser against the euro, as the Japanese currency functioned more as a counter currency in recent FX trading. There have been no major reports out of Japan then and none are due today, which suggests that risk flows could continue to push yen pairs around.

The comdolls showed further weakness in recent FX trading sessions, as Canada printed a weaker than expected trade balance while Australia’s retail sales and trade balance also missed forecasts. Later today, Canada will print its Ivey PMI reading and possibly show a drop from 58.2 to 55.1, which might lead to more weakness for the Loonie. There are no reports due from New Zealand 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.