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Market Session Recaps

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New York Session

Wed, Jun 11 2008, 21:53 GMT
by Forex.com Research Desk

FOREX.com

The Greenback finally lost some ground to some of the majors in the NY session, impacted in part by more hawkish rhetoric from the ECB and a very weak Beige Book report.  Hawkish musings from various Fed officials helped contain the bleeding to some extent.

The ECB's Stark highlighted once again that the largest problem in Europe is that inflation is too high.  Orphanides upped the ante a bit noting that more than one rate hike cannot be ruled out if the economic data warrant it.  The newest Fed member Bullard countered this with some hawkish speak of his own when he said that inflation is a concern if the Fed does not take action (and by action he means raising interest rates).  This was slightly offset by more dovish commentary from the Fed's Kohn who alleged that policy may temporarily allow price increases -- pointing more to a Fed on hold.  So the central bank speak in all was more EUR positive.

EUR/USD opened the session near 1.5514 and closed nearly 40 pips higher around the 1.5550 level.  Besides the hawkish ECB comments, the EUR was helped by a weak Beige Book report from the Fed.  The biggest disappointment in the report was that US consumer spending had weakened through early June despite more than $50 billion in stimulus checks already having gone out.  This is a big disappointment for the markets and the Fed and will likely lead to a re-think on the health of the US economy.

US stocks got clobbered with the Dow plunging more than 200 points on concerns that more writedowns are imminent in the financials space.  This coupled with practically unchanged bond yields gave the Yen a boost in NY trading.  USD/JPY opened near 107.22 and ended the session near the 106.97 mark.

Higher oil prices on lower than expected inventories did not help matters for the USD either.  Oil added another $3.50 to $136.50/barrel in the session.  Even this couldn't help the Loonie out though, as USD/CAD managed to rally from an open near 1.0166 to a close around 1.0198.  This was due in part by weaker Canadian home price and capacity utilization data, which were likely viewed as disinflationary.
 

Upcoming Economic Data Releases (Asia Session):

• 6/11  22:45 GMT  NZ Food Prices (MoM) MAY                                0.30%           - -
• 6/12  0:00 GMT  NZ Business NZ PMI MAY                                     51.4             - -
• 6/12  1:00 GMT  AU Consumer Inflation Expectation JUN                  5.20%          - -
• 6/12  1:30 GMT  AU Employment Change MAY                                25.4K         13.5K
• 6/12  1:30 GMT  AU Unemployment Rate MAY                                 4.20%         4.20%
• 6/12  1:30 GMT  AU Participation Rate MAY                                    65.40%       65.40%
• 6/12  2:00 GMT  NZ Finance Minister Cullen Speaks  
• 6/12  4:00 GMT  JN BoJ Monetary Policy Meeting

Published on  Wed, Jun 11 2008, 21:54 GMT