Asian Session Recap – Sept. 5, 2014

  • Australia’s AIG construction PMI up from 52.6 to 55.0
  • Japan’s leading indicator up from 105.9% to 106.5% vs. 107.2% forecast
  • FOMC member Fisher: U.S. markets have become overheated
  • FOMC member Kocherlakota: Fed interest rates not low enough, unemployment “unacceptably high”
  • NZ Finance Minister English: Kiwi to fall further if U.S. economy recovers
  • Japanese Economy Minister Amari: Yen decline reflects dollar strength

Currency pairs barely made any follow through for the strong moves in the previous trading session, as traders probably took profits off right away or refrained from taking additional positions ahead of the upcoming NFP release.

EUR/USD is moving sideways around the 1.2935 area while GBP/USD bounced up to a high of 1.6326. USD/JPY topped at 105.72 in the early hours before retreating to a low of 105.23, as a couple of FOMC members gave conflicting remarks on the U.S. economy. According to FOMC member Fisher, lower interest rates on riskier credit indicates that the U.S. markets are overheating. On the other hand, FOMC member Kocherlakota insisted that “unacceptably high” unemployment suggests that Fed interest rates are not low enough.

The Japanese government cabinet reshuffle also caused a few jitters among other yen pairs, forcing most to return their recent gains. AUD/JPY retreated slightly below 98.50 while GBP/JPY edged to a low of 171.76 in the past few hours. Japanese Finance Minister Aso noted that sudden forex market moves are undesirable while Economy Minister Amari mentioned that the recent yen decline is just a by-product of the strengthening dollar.

As for economic data, Australia’s AIG construction index marked a gain from 52.6 to 55.0, but provided very little support to the Aussie in today’s trading. New Zealand Finance Minister English mentioned that the Kiwi could fall further if the U.S. economy recovers, yet this wasn’t enough to stop NZD/USD from climbing 4 pips shy of the .8300 handle.

German industrial production and Swiss foreign currency reserves data are up for release in the upcoming London trading session, although both reports aren’t slated to have a huge impact on forex pairs. Do keep tabs on the Swiss currency reserves report though, as it might indicate whether or not the SNB can afford to intervene if EUR/CHF falls closer to its floor.

See also:

U.S. Session Recap

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