Asian Session Forex Recap – Dec. 11, 2014

  • RBNZ decided to keep rates on hold at 3.50% as expected
  • RBNZ Wheeler expressed concerns on house price inflation
  • Japanese core machinery orders down 6.4% y/y vs. estimated 2.1% decline
  • Japan’s tertiary industry activity down by 0.2% in Oct
  • Australian employment picked up by 42.7K in Nov vs. 15.2K forecast
  • Australian jobless rate up from 6.2% to 6.3%
  • Australia MI inflation expectations down from 4.1% to 3.4%

It’s all about economic data for today’s Asian trading session, as the RBNZ statement and Australian jobs figures hogged the forex spotlight. As expected, the RBNZ decided to keep interest rates on hold at 3.50% while repeating that the Kiwi is “unjustifiably and unsustainably” high. What took the markets by surprise though was his mention of stronger house price inflation and the decision to upgrade growth forecasts.

No wonder the Kiwi staged strong gains after the event! NZD/USD zoomed up from the .7700 area to a high of .7868, before erasing some of its gains and settling with a 0.06% loss. NZD/JPY is up 0.31% while EUR/NZD is down 0.01% at the 1.5900 handle.

It seems that the yen’s happy days are over, as a fresh batch of weak reports from Japan forced the currency to return some of its winnings. Core machinery orders saw a 6.4% year-over-year decline, worse than the projected 2.1% drop, while tertiary industry activity chalked up a 0.2% decrease versus the projected 0.1% dip in October.

USD/JPY is up 0.36% so far and is finding support at the 118.00 mark while EUR/JPY is enjoying a 0.40% gain safely above 147.00. AUD/JPY is up 0.48% so far, thanks to upbeat Australian jobs data. The report indicated a 42.7K increase in hiring for November, stronger than the estimated 15.2K rise. However, the previous month’s reading suffered a significant downward revision, enough to bring the jobless rate up from 6.2% to 6.3%.

All eyes and ears are on the upcoming SNB interest rate statement in today’s London trading session, as Thomas Jordan and his men are expected to give their assessment and outlook for the Swiss economy starting 9:30 am GMT. As always, Jordan is likely to reiterate that they are ready to do whatever it takes to defend the franc peg, which might lead to a bit of weakness for the currency. Stay on your toes!

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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