Asian Session Forex Recap – Oct. 14, 2014

  • Australia’s NAB business confidence down from 7 to 5 in Sept
  • Nikkei closed 2.38% in the red today
  • U.K. headline and core CPI to show weaker price pressures?

Risk aversion appears to be in the driver’s seat of forex price movements so far, as higher-yielding currencies gave up ground to the safe-havens. EUR/USD has retreated 0.24% and is edging closer to the 1.2700 major psychological support while GBP/USD is down 0.10% to a low of 1.6064.

In Australia, the NAB business confidence index showed a decline from 7 to 5 in September, reflecting weaker optimism for the month. Despite that, AUD/USD is up 0.12% at .8775 while AUD/JPY has seen a 0.38% gain so far at a few pips above the 94.00 mark.

The Nikkei closed with a significant 2.38% loss for the day, indicating that risk appetite is still weak. Perhaps the upcoming releases from the U.K. and the euro zone could continue to keep forex risk-taking in check, with the U.K. CPI and German ZEW economic sentiment figures up for release starting 9:30 am GMT.

The forex calendar shows that analysts expect the U.K. headline CPI to fall from 1.5% to 1.4% in September and the core figure to dip from 1.9% to 1.8%, farther away from the BOE’s 2% annual inflation target. Meanwhile, the German ZEW index is slated to drop from 6.9 to 0.2, reflecting a downbeat outlook for the euro zone’s largest economy for the current month.

U.S. Session Recap

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

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