Asian Session Forex Recap – July 16, 2015

  • Dairy prices fell by 10.7% in New Zealand auction
  • New Zealand quarterly CPI up by 0.4% vs. 0.5% forecast
  • ANZ consumer confidence down 5.0% in New Zealand
  • Australia’s MI inflation expectations up from 3.0% to 3.4% in June
  • Swiss retail sales and foreign security purchases data due
  • ECB interest rate statement coming up

Retreat, Kiwi bulls, retreat! New Zealand just printed a set of weaker-than-expected figures, spurring a bloodbath among Kiwi forex pairs. NZD/USD is down 76 pips (-1.15%) and is approaching support at .6500, NZD/JPY is lower by 90 pips (-1.10%) and has broken below 81.00, and AUD/NZD is up 101 pips (+0.91%) close to 1.1300.

The bi-weekly global dairy trade auction held in New Zealand showed another massive decline in prices, as the index showed a 10.7% fall after the previous 5.9% drop and set off a flurry of downgrades for milk payout forecasts. This was followed by a lower-than-expected quarterly CPI read of 0.4% versus the projected 0.5% figure for Q2. Soon after, ANZ reported a 5.0% decline in its consumer confidence index for June, sharper than the previous 3.2% tumble.

With that, forex junkies started buzzing about a potential RBNZ interest rate cut next week, as these latest disappointments could add to Forex Gump’s list of factors that warrant further RBNZ easing. Meanwhile, in Australia, the MI inflation expectations index climbed from 3.0% to 3.4% in June, suggesting a potential increase in domestic price levels later on.

AUD/USD is down 23 pips (-0.30%) after dipping to a low of .7348 and AUD/JPY is down 18 pips (-0.20%). The Loonie continued to get clobbered by its forex opponents after the BOC’s rate cut decision.

Will risk aversion still reign supreme in the upcoming London trading session? The ECB interest rate decision could shake things up a bit, as Governor Mario Draghi is expected to comment on the latest Greek bailout and whether or not they’d extend their emergency aid now that the parliament approved the proposal.

When it comes to trading the news, economic releases from Switzerland could pump up the volatility among franc pairs today. Swiss retail sales figures for May are up for release and analysts are expecting to see year-over-year growth of 1.9%, up from the previous 1.6% figure. Also lined up is the foreign securities purchases data, which should provide clues on SNB forex intervention.

U.S. Session Recap

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