Asian Session Forex Recap – June 25, 2015

  • Chinese central bank pumped up liquidity by 35 billion CNY
  • New Zealand property investment lending jumped 7.6%
  • German GfK consumer climate index due
  • EU Greek debt deal talks to resume today

Commodity currencies are painting the forex town red, thanks to the PBOC’s decision to pump up liquidity by 35 billion CNY this week. This could give the Chinese economy a much-needed boost, which might then spur business activity and demand for raw materials from export-driven nations such as Australia and New Zealand.

AUD/USD popped up 46 pips (+0.59%) from an intraday low of .7697, AUD/JPY advanced by 38 pips (+0.40%), NZD/USD climbed 20 pips (+0.51%) past the .6900 mark, and NZD/JPY recovered by 28 pips (+0.33%). These comdolls also outpaced their European forex rivals, with EUR/AUD down 57 pips (-0.39%) and GBP/AUD falling by 113 pips (-0.55%) and counting.

In New Zealand, property investment lending reportedly jumped by 7.6%, as housing speculators took advantage of the low interest rate environment before the RBNZ’s mortgage restrictions kick in. This didn’t seem to have a direct impact on the Kiwi’s price action for now, but it’s worth taking note of these housing market trends and its potential effect on future RBNZ decisions. Will Wheeler and his boys take it easy with rate cuts for fear of stoking a property bubble?

In the meantime, short-term forex traders might turn their attention to the upcoming release of Germany’s GfK consumer climate index at 6:00 am GMT. The reading is expected to dip from 10.2 to 10.1 for the current month, but there’s a good chance of seeing a downside surprise due to the downbeat vibes from the Greek debt drama. Note that Germany printed a much weaker than expected Ifo business climate index yesterday so consumers might be feeling the blues as well.

Other potential market-movers in the next few hours include a speech by SNB head Thomas Jordan and the next set of meetings among EU leaders. Jordan might be his usual jawboning self in reiterating that they’d like to see a weaker franc and that the central bank is ready to intervene if necessary. Meanwhile, news updates on the Greek debt negotiations could continue to play with the forex market’s feelings, but the lack of progress at the end of the day might still drag the euro lower. Stay tuned!

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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