Asian Session Forex Recap – June 4, 2015

  • Australian retail sales stayed flat in April vs. projected 0.4% uptick
  • Australia’s March retail sales downgraded from 0.3% to 0.2%
  • Australian trade deficit widened from 1.23B AUD to 3.89B AUD vs. 2.17B AUD estimate
  • Australia’s exports slipped 6% in April
  • BOE monetary policy statement scheduled today

What a wipeout for the Aussie! After a few days of consecutive rallies, the Australian dollar got pushed down under by its forex counterparts due to a double-whammy of bad reports. AUD/USD dipped to a low of .7705 (-0.71%) after today’s set of data was released, AUD/JPY dropped to the 96.00 handle (-0.57%), and AUD/CAD is down 53 pips (-0.55%).

Australia’s retail sales figure stayed flat in April instead of showing the projected 0.4% uptick while the previous month’s increase was revised down from 0.3% to 0.2%. To make things worse, the April trade balance also printed a dismal result, reflecting a wider than expected deficit of 3.89 billion AUD – its largest trade deficit EVER – versus the estimated 2.17 billion AUD shortfall and the previous period’s 1.23 billion AUD trade deficit. Components of the report revealed that the slump was caused by a 6% tumble in exports due the temporary closure of ports then.

With no other top-tier reports released in the past few hours, dollar pairs were able to take a break from their recent volatile forex moves. Euro crosses managed to carry on with their rallies, as Asian session forex traders caught up on the news that the ECB doesn’t really plan on front-loading its QE program. Yen pairs are also in the green, thanks to the slight pickup in risk appetite.

GBP/USD is down 7 pips (-0.05%) and is cruising around the 1.5330 levels, USD/JPY looks ready to resume its climb and is testing the resistance at 124.50 (+0.21%), and EUR/USD is flat at 1.1270. Meanwhile, EUR/NZD is enjoying a 22-pip lead (+0.16%), EUR/CAD is up 15 pips (+0.11%), and EUR/JPY is higher by 28 pips (+0.19%).

It could be the British pound’s turn to take center stage in the upcoming London trading session, as the BOE is set to announce its monetary policy decision at 12:00 pm GMT. No actual changes are expected for interest rates and bond purchases, but forex traders are likely to react to any shift in the central bank’s rhetoric. Better take time to read my buddy Forex Gump’s Monthly Review on the U.K. Economy to figure out how the BOE’s economic assessment and outlook might turn out!

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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