Asian Session Forex Recap – July 9, 2015

  • Australia added 7.3K jobs in June vs. expected 2.1K decline
  • Australia’s jobless rate came in at 6.0% vs. projected 6.1% reading
  • Australia’s May jobs figure downgraded from 42K to 40K, jobless rate revised to 5.9%
  • Chinese CPI climbed from 1.2% to 1.4% y/y in June
  • Chinese producer prices down by 4.4% y/y in June
  • Government-owned China Securities Finance Corp provided 260B CNY to buy stocks
  • BOE monetary policy statement coming up

Asian session forex junkies took a break from focusing on the gloom and doom in the equity markets to look at the latest jobs report from Australia. The actual figures came in mostly better than expected, as the economy added 7.3K jobs in June instead of showing the projected 2.1K decline. Aside from that, the jobless rate came in at 6.0%, better than the estimated 6.1% reading. However, the employment figure for May was downgraded to show a 40K increase in hiring from the initially reported 42K gain.

AUD/USD popped up to a high of .7475 moments after the upbeat jobs figures were printed and is up 36 pips (+0.49%). AUD/JPY surged past the 90.00 handle and is up 79 pips (+0.87%). The Aussie also advanced against its European currency counterparts, with EUR/AUD down 64 pips (-0.43%) and GBP/AUD down 55 pips (-0.28%).

Inflation figures from China came in mixed, with the headline CPI showing a better-than-expected climb from 1.2% to 1.4% year-over-year in June and the PPI printing a worse-than-expected 4.4% annualized drop in prices. Chinese stock indices managed to pare their recent losses, although this was partly due to the mainland’s major exchanges halting trading for the day and a 260 billion CNY loan provided by the government-owned China Securities Finance Corp to encourage top fund management firms to buy stocks.

Risk appetite popped its head back in the markets, allowing yen pairs to regain ground in the past few hours. EUR/JPY is up 58 pips (+0.43%), GBP/JPY is up 107 pips (+0.58%), and NZD/JPY is up 44 pips (+0.54%). The safe-haven U.S. dollar also gave back some of its gains, with GBP/USD up by 21 pips (+0.14%), USD/CAD down by 26 pips (-0.23%), and NZD/USD up by 10 pips (+0.11%).

Pound pairs could be in the forex limelight in the upcoming London trading session, as the BOE is set to make its monetary policy statement. No actual changes are expected for interest rates and asset purchases, but market watchers seem to be waiting for some remarks on how the U.K. might be affected by the Greek debt crisis. Downbeat comments from Governor Carney could drive the pound much lower while reassuring remarks could allow the British currency to stay afloat. As always, keep your eyes and ears peeled for any updates from Greece that might affect overall market sentiment!

U.S. Session Recap

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