Asian Session Recap – February 26, 2014

  • NZ finance minister English says rate hikes are inevitable
  • AU quarterly construction done -1.0% vs. 0.2% estimates
  • China sets yuan reference rate to its weakest in months
  • Nikkei closes down by 0.54% at 14,970.97
  • German GfK consumer sentiment at 8.5 (vs. 8.2 expected) in March
  • Swiss UBS consumption indicator at 1.44 vs. 1.80 previous in January

Range alert! The major currencies continued to trade on tight ranges as the lack of new direction and preparation ahead of today’s UK and US reports limited volatility. The only currency that saw any real action was the Aussie, which was weighed by a weak construction report and concerns over China’s growth.

AUD/USD dropped to as low as .8970 before it steadied around the .9000 psychological handle. The move can also be seen in other AUD crosses as stop losses were triggered. Meanwhile, NZD/USD was quick to rebound (it’s currently trading 30 pips above its session lows) after a comment from Finance Minister English suggested rate hikes in the near future.

The People’s Bank of China (PBoC) briefly caused a few splashes in the markets when it set the yuan’s reference rate to its lowest since December 20. The effort to weaken the yuan weighed on the Asian markets for a while until investors chose to interpret the move as the PBoC’s first attempts at widening the yuan’s trading band. Talk about optimism!

Over the next few hours forex traders will likely trade the second estimate of the UK GDP. Market players aren’t expecting any adjustments but keep an eye on the pound pairs’ major psychological levels for intraday reversals if you’re planning on trading the news!

See also:

U.S. Session Recap

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