Asian Session Forex Recap – July 10, 2015

  • Chinese equity indices showed back-to-back gains
  • Producer prices in Japan fell by 2.4% y/y in June vs. -2.2% forecast
  • Japanese consumer confidence index improved from 41.4 to 41.7 in June
  • Australian home loans slumped by 6.1% in May vs. projected 3.3% drop
  • U.K. trade balance and construction output numbers due

Higher-yielding currencies had an after-party across the forex charts in today’s Asian trading session upon finding out that Greece is getting ready to submit a revised economic reform proposal. Heck, Chinese equities even managed to post back-to-back daily gains, as risk appetite picked up.

Economic data was still mostly weaker than expected, though, as Japan and Australia released a couple of dismal figures. In Japan, producer prices fell by 2.4% in June versus the projected 2.2% decline, suggesting potentially weaker consumer inflation down the line. The country’s consumer confidence index for June improved from 41.4 to 41.7, short of the projected 41.9 reading. Meanwhile, Australia reported a 6.1% slump in home loans for May, worse than the estimated 3.3% decline, while the previous month’s reading was downgraded from a 1.0% gain to just 0.7%.

AUD/USD is up 32 pips (+0.44%), NZD/USD is up 20 pips (+0.32%), AUD/JPY is up 72 pips (+0.81%), and NZD/JPY is up 55 pips (+0.67%). The rest of the yen pairs also gained ground, with USD/JPY advancing by 50 pips (+0.42%), GBP/JPY climbing by 106 pips (+0.58%), and EUR/JPY rising by 135 pips (+1.01%).

The euro is drawing support mostly from speculations that not all hope is lost in Greece, as government officials have reportedly revised their reform proposals to be more in line with their creditors demands. For some forex market analysts, this significantly lowers the likelihood of a Grexit by the end of the five-day ultimatum this weekend. Any updates on this new development could continue to push euro pairs around until the end of this trading week.

When it comes to economic releases, forex traders could also pay attention to the Italian and French industrial production numbers, along with the U.K. trade balance and construction output figures set to be printed in today’s London trading session. Keep your eyes peeled for stronger-than-expected data that could add fuel to those risk rallies!

U.S. Session Recap

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