Forex Daily Recap – Former Safe-haven Ninja Slammed to 4-Month Low LevelsA busy Friday for the Fiber traders as there appeared descent volatility in the pair today with mixed reports. Greenback slipped from top levels as Trump threatened Mexico with 5% tariffs.
The former “safe-haven” pair or Ninja continued the last day’s tumbling rally into Friday’s trading session. Last night, Japanese May YoY CPI figures excluding Fresh Food reported 0.1% lesser than the consensus estimates of 1.2%.
Today, in the morning session, the April Housing Starts data also came up with disappointing figures. Market hoped the statistics to report near -0.9% but the actual numbers recorded -5.7%. With such sparse domestic data, investors lost hope in the Japanese Yen. The currency continued to lose value throughout the day. Adding to the sour sentiment, the Buck also dropped heavily reaching near 97.76 levels over trade tensions.
The Loonie pair made the opening on Friday’s trading session near 1.3536 levels. Anyhow by day end, the pair was hovering slightly lower near 1.3520 levels. Though there was quite shedding of pips in today’s session, the pair managed to keep up some weekly gains. In the Asian session, the pair remained uplifted marking day’s/weekly high near 1.3566 levels. The USD/CAD pair gained strength as Crude continued to lose value. The Crude Oil WTI Futures was trading near $53.25 bbl at around 19:21 GMT. The commodity price slipped drastically following US President Trump’s threat to impose tariffs on Mexico. Trump tweeted that the US would apply 5% taxes on all goods that come from Mexico. However, following some positive CAD data, the pair started the downfall for the day. Canadian March Q1 MoM GDP reported 0.5% over 0.3% estimates. The then plunging pair found support near day’s low of 1.3510 levels over positive USD data.
The Euro pair had managed to remain range-bound in the last session on account of Ascension Day. The pair attempted to maintain a similar movement in the earlier hours, opening near 1.1136 levels. At around 06:00 GMT, the German April Retail figures came out. The market had positive expectation over both the monthly and yearly data. However, the low annual significant data reported higher-than-estimated, while high vital monthly data missed estimates. It was quite shocking to see the pair still heading upwards in the middle of such adverse reports.
Nevertheless, the pair started losing momentum at around 08:00 GMT. Italian GDP, CPI, and PPI figures came out. The country is already under debt crisis. Italian Annualized Q1 GDP figures reported as -0.1% over +0.1% estimates. The May Consumer Price Index (EU Norm) YoY broadcasted 0.1% lower than the market expectation of 0.2%. Also, Italian April PPI data reported 0.4% below 2.5% estimates. By this time, the pair had lost almost 25% of the morning gains. More 25% gains vanished with poor German May Harmonized Index of Consumer Prices. Laterwards, the pair kept uplifting over each release of USD-specific events which came out in-line with estimates. By then, the EUR/USD pair reached the highest point for the day near 1.1180 levels. However, the Fiber faced a healthy pullback making it reach near 1.1140 levels. The reason behind the sudden fall was the positive US Spending and Personal Income data.
The South African Rand pair kept slumping since the early morning session. Rand was under due pressure as internal political worries heated up. President Cyril Ramaphosa appoints David Mabuza as the Deputy President. Investors stay worried as Mr. Mabuza was involved in various corruption matters. With the Greenback also losing power, the USD/ZAR pair touched the day’s low near 14.54 levels.