June 2015 review
June was a very volatile month for currencies. The Euro alone gained almost 5% against the US dollar at the beginning of the year. We were able to catch a few good trades in the NZD/USD and AUD/USD pairs, among others, which helped our signal performance for the month. Below we have summarized all the factors which have affected the Forex market.
In the Eurozone the main event for the month culminated with the Greek referendum. After a stressfull rollercoaster of proposals and denials, which helped the USD sell off and added 500 pips to the EUR, the final decission was left in the hands of the Greek people – Do they want to stay in the Euro or not? We have to wait and see the people’s decission. At the moment selling presure on the USD has eased and we are looking forward to the referendum results.
The USD on the other hand had a period of consolidation closing the month lower agains major currencies. An improvement in the US economic data, proved that the weakness the economy showed in the beginning of the year was mainly due to factors like west coast port delays and the cold winter. Although the payrolls increased above forecast , followed by positive consumer sentiment and improved retail sales, the US dollar didn’t benefit much.
On another continent, mixed messages by BOJ governor and a quick response by Japan’s Minister of Economy send the USD/JPY down by 300 pips and then stopped. Kuroda’s comments suggested a Yen at fair value, while the Minister of economy responded by expressing the government’s contentment with weak Yen, which was also the comment that suspended the USD/JPY selloff. We saw the USD/JPY brake 122 resistance level and continued up to 1.2580 this month, before the reversal from Kuroda’s comments.
June US data showed improvement in the economy, with better nonfarm payrolls, and an historicaly low unemployment rate of 5.3% which we have not seen since 2008. Consumer confidence picked up and indicators closed above 100 points, which consequently had a positive impact in retail and home sales. We are still waiting for the manufacturing data to make a strong move.
Greece is still weighting on broad european expectations. Inflation numbers remain in dangerous territory, and also unemployment is still high at 11.1%. The only sectors that show improvement are manufacturing and services.
The numbers show a decreasing manufacturing expantion. Q2 GDP came out a bit higher than estimates, but still short of previous quarter results. Services and construction are the only sectors showing continuous growth at increasing pace.