Asian Session Forex Recap – August 8, 2016

  • Japan current account surplus up from 1.41T JPY to 1.65T JPY in June
  • Japan’s bank lending up from 2.0% to 2.1% in July
  • AU ANZ jobs ads down by 0.8% vs. 0.4% uptick in June
  • China’s trade surplus pops up from 311B CNY to 343B CNY in July
  • China’s trade surplus (in USD) up to 52.4B in July vs. 48.1B in June
  • Japan’s Economy Watchers’ sentiment up from 41.2 to 45.1 in July

The Greenback gave up some of its gains against its major counterparts, as a bit of risk appetite hit the Asian bourses following last Friday’s NFP release.

Major Events:

China’s trade data – Data from the world’s second largest economy reflected weaker exports AND imports for the month of July. In yuan terms, China’s exports is up by 2.9% from a year earlier in July after popping up by 1.3% in June. Meanwhile, imports registered a 5.0% decline for the month, faster than the 2.3% drop in June. This translated to a 342.8B CNY surplus, up from the 311.12B CNY figure in June.

It’s the dollar-denominated numbers that caught more investor attention though. See, the yuan weakened by as much as 0.3% against the dollar for the month, which kinda cushions the more realistic trade figures.

Exports is down by an annualized figure of 4.4% in July, which is just a bit better than the 4.8% decline in June. Imports fell by a whopping 12.5% though, much higher than June’s 8.4% drop, and contributed to a trade surplus of $52.4B against June’s $48.1B figure. Naturally, the trade numbers raised concerns that China’s companies are just starting to feel the pinch of weaker global and domestic demand.

Overall risk appetite – Not even China’s iffy trade numbers were enough to rain on the market bulls’ parade though. Thanks to last Friday’s NFP raising chances of a Fed rate hike and the yen dropping against most of its counterparts, the Asian bourses ended the day in the green.

Nikkei is up by 2.44%, Hang Seng is up by 1.21%, China’s Shanghai Index is up by 0.20%, and Australia’s ASX is up by 0.70%.

Major Market Movers:

USD – The low-yielding dollar was smacked around by its higher-yielding counterparts on a bit of risk appetite in the markets.

EUR/USD is up by 22 pips (+0.20%) to 1.1103, GBP/USD is up by 8 pips (+0.06%) to 1.3087, and USD/CAD is down by 15 pips (-0.11%) to 1.3169.

NZD – The New Zealand dollar saw downward spikes early in the session after research firm BNZ upped its RBNZ rate cut forecasts to at least three more 0.25% cuts by November.

NZD/USD slipped to a low of .7087 before capping the session with a 24-pip loss (-0.34%) to .7113. NZD/JPY also fell to 72.37 before closing with a 21-pip drop (-0.29%) to 72.57 and EUR/NZD shot up 1.5649 before levelling off with an 88-pip rise (+0.57%) to 1.5612.

Watch Out For:

  • 6:00 am GMT: German industrial production (0.9% expected, -1.3% previous)
  • 7:15 am GMT: Swiss CPI (-0.5% expected, 0.1% previous)
  • 8:30 am GMT: Euro Zone Sentix investor confidence (3.6 expected, 1.7 previous)

See more:

Check out Last Week’s Top Movers!

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!