Asian Session Forex Recap – Feb. 4, 2015

  • New Zealand employment change up by 1.2% vs. 0.8% estimated increase
  • New Zealand jobless rate up from 5.4% to 5.7% on higher participation rate
  • Chinese HSBC services PMI down from 53.4 to 51.8 in Jan
  • Japanese average cash earnings up by 1.6% y/y as expected
  • U.K. services PMI, euro zone retail sales due

Risk appetite? Bring it on! Higher-yielding currencies continued to party in today’s Asian trading session, as forex traders felt more confident about taking on more risk. AUD/USD is up 44 pips (+0.56%), USD/CAD is down 2o pips (-0.18%), and NZD/USD is up 85 pips (+1.18%).

Stronger than expected jobs data from New Zealand fueled the Kiwi’s flight, as the economy showed a 1.2% quarterly gain in hiring. This was stronger than the estimated 0.8% gain while the previous period saw an upward revision from 0.8% to 0.9%. The jobless rate surprisingly jumped from 5.4% to 5.7% instead of dropping to the projected 5.3% reading, but a closer look at the underlying figures reveals that this was spurred by an improvement in labor force participation.

The Kiwi also sustained its advance against its other forex rivals, with EUR/NZD showing a 1.05% decline and GBP/NZD looking at a 0.97% loss so far. The Australian dollar was also able to follow suit, although its gains were limited when China reported a decline from 53.4 to 51.8 in its HSBC services PMI.

Up ahead, the forex calendar shows that pound pairs might see a little bit more action in the upcoming London trading session, with the U.K. services PMI up for release at 10:30 am GMT. The reading is slated to climb from 55.8 to 56.6, which would reflect a faster pace of expansion in the industry and spur a stronger pound rally. Also up for release today is the euro zone’s retail sales data, which could show a 0.1% decline in consumer spending.

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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