Asian Session Recap – July 23, 2014

  • Australia CPI up by 0.5% in Q2, annual inflation at 3%
  • Australia trimmed mean CPI up by 0.8% as expected
  • BOJ Nakaso: Economic reaction to tax hike is as expected
  • BOE to release meeting minutes

Major forex currencies were all over the place in today’s Asian trading session, with AUD/USD soaring from a low of .9380 to a high of .9438 and EUR/USD plummeting to the 1.3460 levels. GBP/USD is sitting tight above 1.7050 ahead of today’s top-tier U.K. events while USD/JPY edged below 101.50.

Inflation reports from Australia were mostly in line with expectations, erasing speculations that the RBA might cut interest rates soon. The quarterly CPI came in at 0.5%, weaker compared to the previous period’s 0.6% increase but enough to bring the annual inflation figure to 3%. Core inflation is at 2.9%, still within the central bank’s 2-3% inflation target.

In Japan, BOJ official Nakaso reiterated that the economic reaction to the April sales tax hike has been in line with their projections. He noted, however, that the BOJ is keeping a close watch on the political tension in Gaza and in Russia. The Nikkei gave in to risk aversion in the past few hours though, leading most yen pairs to edge lower as well.

The British pound might steal the spotlight in the upcoming London trading session, as the BOE is set to print the minutes of its latest monetary policy meeting. Bear in mind that the previous meeting minutes have turned out somewhat bullish for the pound, as policymakers expressed their intention to hike rates before the end of the year. However, data from the U.K. hasn’t been as impressive lately, leading some traders to think that the BOE minutes might be less hawkish. Stay on your toes if you’re trading the release or stay on the sidelines if you can’t handle the volatility!

See also:

U.S. Session Recap

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