Asian Session Forex Recap – Jan. 21, 2015

  • BOJ decided to keep monetary policy unchanged for now
  • New Zealand quarterly CPI down by 0.2% in Q4
  • U.S. President Obama: U.S. oil boom supportive of economic recovery
  • U.K. jobs data and BOE minutes due

The Kiwi was off to a weak start in the early Asian trading session, after New Zealand reported a worse than expected 0.2% decline in quarterly CPI for Q4 2014. This led analysts to project that the RBNZ will keep interest rates on hold for the rest of the year. NZD/USD dipped to a low of .7628 before rebounding and chalking up a 0.32% gain so far.

Forex traders turned their attention to the BOJ interest rate statement as the trading session rolled along, with the yen gaining ground on the central bank’s decision to keep monetary policy unchanged. BOJ officials also decided to downgrade its inflation forecasts but cited a more positive growth outlook. USD/JPY is down 0.78%, EUR/JPY is down 0.57% and GBP/JPY is down 0.69%.

The U.S. dollar is slightly lower against its other major forex counterparts for now, as U.S. President Obama’s State of the Union address seems to have lifted risk appetite. According to the President, the U.S. oil boom is supportive of the ongoing economic recovery and that further progress is likely.

The forex calendar shows that the upcoming London trading session could be an exciting one, particularly for the British pound. The U.K. jobs report is up for release at 10:30 am GMT and might show a 24.2K increase in hiring and a rise in average hourly earnings. Meanwhile, the BOE minutes could still indicate a 2-7 vote in favor of keeping rates unchanged and a unanimous vote to maintain asset purchases. If you ain’t ready for extra volatility, better stay on the sidelines then!

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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