FX Daily Wrap Up

While many of the markets are cooling off as we head into the afternoon and evening sessions, it does not appear that the overall atmosphere of high volatility has waned. Many pairs today had more than 100-pip ranges from what appears to be further unwinding of carry trades – the Yen was no exception, falling into another steep rally against its higher-paying counterparts. A small exception for the day was the US Dollar, which held its current position and posted a modest gain of 20 pips against the Yen while most “big” currencies dropped. News out of the US was bearish, with a disappointing ISM service sector report. Following up on the better-than-expected manufacturing number last week, today’s service gauge was quite a bit below expectations – forecast predicted a dip to 57.1 for the indicator, but was instead met with a 54.3 posting. While this was still above the 50.0 growth-contraction level, it is also the slowest pace of expansion since April 2003. Overall, the US Dollar was on top with most traders ignoring the recent news reports. Looking to the near east, the EUR/JYP cross had a bit of an odd day today as the Yen produced gains up until 8:00 AM CST, took a drastic turn in favor of the Euro, then reversed again and closed out in slight favor of the Yen. Part of the large swing could not be explained, but it appears when the majority of the market makers in the Far East went home for the evening, the tides turned and the Euro made small gains until the correction ran its course. Currently, the USD/JYP is trading at 115.86, and the EUR/JYP is at 151.73

David Hilgeman, XPRESSTRADE Analyst