Asian Session Forex Recap – July 6, 2015

  • Greek referendum resulted in the rejection of austerity and bailout
  • Chinese government suspends IPOs to shore up equity market
  • Australia’s ANZ job advertisements picked up by 1.3% in June
  • Australia’s MI inflation gauge fell from 0.3% to 0.1% in June
  • NZ Prime Minister Key: NZD/USD may trade below .6500
  • German factory orders data and Swiss CPI due

Gaps, gaps everywhere! Just as in the previous week, most forex pairs gapped down over the weekend after market watchers found out that the Greek referendum resulted in the rejection of further austerity measures and the current bailout proposal. With that, Greek government officials and EU leaders are back to the drawing board while euro pairs bask in all the uncertainty.

EUR/USD started off at 1.0988 and is down 84 pips (-0.76%), EUR/JPY opened below the 134.00 handle and is down 166 pips (-1.22%), and EUR/GBP is still trading below .7100 and is down 42 pips (-0.59%).

In China, government agencies are scrambling to put an end to the equity market bloodbath with their decision to suspend IPOs in the near term. This was also accompanied by a move to convince several brokerage firms to pool funds to buy blue-chip stocks. Looks like the PBoC’s recent easing efforts failed to do the trick!

Commodity currencies are mostly weaker for the day since risk aversion looks ready to extend its stay in the financial markets. Australia reported a decline in its MI inflation gauge from 0.3% to 0.1% in June, signaling that weaker price levels might be seen. On a more positive note, ANZ showed a 1.3% increase in job advertisements for June, which might yield an upside surprise for the country’s upcoming employment release.

AUD/USD is lower by 39 pips (-0.53%) after breaking below the key .7600 support area, AUD/JPY is lower by 94 pips (-1.03%), NZD/USD is down 18 pips (-0.27%), and NZD/JPY is down 60 pips (-0.74%). A bit of jawboning from New Zealand Prime Minister Key also added to the Kiwi’s forex losses, as he said that NZD/USD may trade below .6500 soon.

Up ahead, forex traders could turn their attention to Germany’s factory orders report at 6:00 am GMT and Switzerland’s CPI release at 7:15 am GMT. Updates on what EU officials plan to do now that Greece is rejecting the bailout proposal might also have a say in euro price action over the next few hours. Stay tuned!

U.S. Session Recap

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