Asian Session Recap – Sept. 16, 2014

  • Chinese foreign direct investment down by 1.8% to 4-year low
  • RBA minutes show concern on rising house prices
  • RBA not looking to cut interest rates anytime soon
  • BOJ Gov Kuroda: Stimulus will continue until inflation target is reached
  • U.K. headline and core CPI figures due
  • German and euro zone ZEW economic sentiment readings to decline?

Is the dollar back on its feet? After a few days of weakness, the U.S. currency is flexing its muscles in the forex market once more, as it advanced to some of its counterparts in today’s Asian session. AUD/USD resumed its drop below .9000 after filling in the weekend gap while NZD/USD showed downside momentum to .8150 after briefly testing the .8200 handle.

China’s foreign direct investment data reflected more signs of weakness in the world’s second largest economy, as the report marked a 1.8% year-to-date decline to its lowest level in four years. This spells downbeat prospects for Australia’s commodity exports, which might continue to weigh on the country’s economic growth. Minutes of the latest RBA meeting showed that the central bank isn’t looking to cut rates anytime soon though, as policymakers have gotten increasingly concerned about rising house prices.

USD/JPY had dipped a few pips below the 107.00 handle in the early trading hours but rebounded to the 107.30 area after BOJ Governor Kuroda emphasized their commitment to keep stimulus in place until the inflation target is reached. EUR/JPY also drew support from this event, as the pair bounced off its session lows at 138.53 to a high of 138.80.

For today’s London forex trading session, pound pairs could see additional volatility on the release of the U.K. inflation reports at 9:30 am GMT, with the headline figure slated to dip from 1.6% to 1.5% and the core version of the report likely to hold steady at 1.8%. Also due today is the German and euro zone ZEW economic sentiment figures, both of which are estimated to show weaker optimism for the economy.

U.S. Session Recap

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