Asian Forex Session Recap – Oct. 7, 2014

  • Nikkei down by 0.67% for the day
  • RBA kept rates unchanged at 2.50% as expected
  • RBA Stevens: AUD still high by historical standards
  • BOJ made no changes to monetary policy for now
  • BOJ highlighted weakness in production after tax hike
  • BOJ press conference coming up
  • Swiss CPI, retail sales, foreign currency reserves data due
  • U.K. manufacturing production to show 0.2% uptick?

Forex pairs jumped back to action after a lazy start to the week, as top-tier events rocked the markets in today’s Asian session. EUR/USD slumped to a low of 1.2605 before recovering to 1.2630 while USD/JPY rallied to a high of 109.24 then fell to a low of 108.54.

The BOJ decided to keep monetary policy unchanged for the time being, despite calls for additional easing. The statement indicated that policymakers are getting concerned about the weakness in industrial production after the sales tax hike, causing them to downgrade their forecasts in that sector. BOJ Governor Kuroda has yet to attend the press conference after the event and more questions regarding future policy changes could be raised.

The RBA also decided to keep interest rates on hold at 2.50% as expected, citing that economic performance has been moderate so far. They noted that there was some degree of volatility in jobs growth but that it would take some time before unemployment would drop. RBA Governor Stevens also mentioned that the prudent course to take would be to maintain a period of stability in interest rates.

Up ahead, the forex calendar shows that Switzerland has a lot of reports on tap, such as the retail sales, CPI, and foreign currency reserves data. Retail sales are expected to show an annualized 0.8% rebound while the CPI could print a 0.2% uptick in price levels. Meanwhile, the foreign currency reserves report could indicate whether or not the SNB could afford to intervene in the forex market to keep the franc weak.

Also lined up for today is the U.K. manufacturing production report, which might print a 0.2% gain for August. Watch out for this release at 9:30 am GMT, as it could rock the pound pairs!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis. Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!