Disappointing US data sends USD lower; USD buying likely to resume later

USD is giving up earlier gains after a number of US data releases disappointed this morning. Empire State Manufacturing Index disappointed when it came out at 11.9 from previous 21.7. Market expected 20.7.

TIC data describing net foreign purchases of long-term securities came out worse than expected at 24B. This reading marks deterioration as even the previous reading of 27.2B was regarded as highly disappointing. Market expected 57.7B.

Even NAHB Housing Market Index fell short of expectations when results came out at 16 compared to 17 expected.

As a result USD is giving up earlier gains across the board. EURUSD is currently 130+ points up from todays lows. Strong downtrend is however likely to attract selling. Only a close above last Fridays highs could be interpreted as a sign of diminishing bearish sentiment.

Aussie traders will want to pay attention to the minutes from the latest Monetary PolicyMeeting that will be released at 9:30 pm EDT. Over the past two weeks AUDUSD lost 500 points and according to COT report futures holdings were trimmed only a bit.AUDUSD can easily become sell on rallies and unwinding of accumulated longs could send AUD much lower. The market implied chances of a June hike fell from over 50% toabout 30% so even from a macro perspective holding AUD became less interesting then only a short time ago.

by P.U. - AshrafLaidi.com staff