Asian Session Forex Recap – June 3, 2015

  • Australian economy grew 0.9% in Q1 2015 vs. 0.7% forecast, 0.5% previous
  • Chinese HSBC services PMI climbed from 52.5 to 53.9 as expected
  • New Zealand ANZ commodity price index fell 4.7% in May
  • U.K. services PMI, ECB rate statement coming up

Risk appetite? Bring it on! Higher-yielding currencies continued to advance against their safe-haven forex counterparts in today’s Asian session, fueled by speculations that a Grexit can be avoided. Leading the pack is the euro, which is up 32 pips (+0.33%) against the U.S. dollar and 18 pips (+0.15%) against the Japanese yen.

The Australian dollar also had its fair share of gains spurred by an upbeat GDP report. As it turns out, the economy expanded by 0.9% in the first quarter of the year, outpacing the forecast of 0.5% growth and the previous period’s 0.5% GDP reading. Components of the report showed that exports actually picked up during the first three months of the year, even though commodity prices had been falling then.

AUD/USD is up 29 pips (+0.38%) and is testing the .7800 handle, AUD/JPY is up 15 pips (+0.16%) at 96.60, and AUD/NZD is higher by 48 pips (+0.45%).

In New Zealand, ANZ reported that their commodity price index slumped by 4.7% in May, following April’s 7.4% decline. Underlying data revealed that the tumble in dairy prices were mostly to blame for the drop, as skim and whole milk powder prices fell 13.2% and 10% respectively. Because of that, the Kiwi was barely able to take part in the risk rallies, leaving NZD/USD flat at .7180 and NZD/JPY down by 21 pips (-0.24%).

In the next few hours, any updates on the Greek debt talks or the rumored list of economic reforms to be proposed by EU and IMF officials could determine the fate of the shared currency. After all, the clock is ticking for Greece to meet its debt obligations for this month or admit defeat and possibly get kicked out of the euro zone… unless it agrees to its creditors’ demands and is able to secure more bailout funds. Apart from that, the ECB interest rate statement is coming up at 12:15 pm GMT and Governor Draghi’s remarks might also push euro forex pairs around.

Another potential market-mover in today’s London trading session is the release of the U.K. services PMI at 9:30 am GMT. This report is likely to have a stronger impact on the pound’s forex price action compared to the manufacturing and construction PMIs since the services sector accounts for a huge chunk of overall economic activity in the United Kingdom. Analysts are expecting to see a small dip from 59.5 to 59.2, which would reflect a slower expansion in the industry.

U.S. Session Recap

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