Asian Session Forex Recap – May 12, 2015

  • BOJ Gov Kuroda: Not considering cutting rates on excess reserves
  • Fitch: Australia’s AAA credit rating not at risk
  • Australia’s home loans up by 1.6% in March, higher than 1.1% estimate
  • Australia’s annual government budget up for release
  • U.K. BRC retail sales monitor down by 2.4% in April

The Australian dollar is putting up a really good fight against its forex rivals today, as the currency managed to draw support from a stronger-than-expected 1.6% increase in home loans for March and positive remarks from Fitch. According to the credit rating agency, the country’s AAA standing is not at risk ahead of the government’s annual budget release today.

AUD/USD is enjoying a 38-pip lead (+0.49%), AUD/JPY is up 56 pips (+0.60%), EUR/AUD is down 33 pips (-0.23%), and GBP/AUD is lower by more than a hundred pips (-0.53%). The pound has given back a few of its recent wins lately, after the U.K. BRC retail sales monitor indicated a 2.4% decline in April, erasing part of the 3.2% increase seen in the previous month.

Yen pairs are slightly higher for the day, as risk appetite was able to extend its stay in today’s Asian trading hours. In his testimony before parliament, BOJ Governor Kuroda emphasized that he is not looking into cutting interest rates on excess reserves despite speculations that the central bank is hoping to stimulate more lending activity. Kuroda clarified that these interest payments to commercial banks are actually helping the central bank expand the monetary base.

Moving on, the forex calendar shows that the U.K. is set to release its manufacturing production data at 9:30 am GMT and possibly show a 0.3% uptick for April, following March’s 0.4% gain. Stronger than expected data could allow the pound to extend its post-election and post-BOE statement gains, as this might set the tone for an upbeat Inflation Report hearings later on. No other major events are lined up so make sure you keep close tabs on any market updates that might affect overall sentiment!

U.S. Session Recap

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