Asian Session Forex Recap – August 31, 2015

  • Goldman Sachs downgraded Chinese growth forecasts for the next three years
  • Japanese July preliminary industrial production down by 0.6%
  • New Zealand ANZ business confidence slumped from -15.3 to -29.1
  • Australia’s quarterly company operating profits down by 1.9% as expected
  • Australian private sector credit up by 0.6% in Aug
  • German retail sales and euro zone flash CPI numbers due

Uh oh, are markets back in risk-off mode? Asian equities are back in the red at the start of this week, ushering negative vibes in the forex market as well. Word through the grapevine is that Goldman Sachs announced downgrades in its Chinese growth forecasts for the next three years, citing the increased downside risks on the industrial sector. The multinational investment banking group projected that the world’s second largest economy will expand by only 6.4% in 2016 from the previous 6.7% estimate.

Aussie pairs are looking weaker so far, with AUD/USD down by 25 pips (-0.37%), AUD/JPY down by 81 pips (-0.90%), EUR/AUD up by 180 pips (+1.15%), and GBP/AUD up by 130 pips (+0.61%). Not even the stronger than expected 0.6% increase in private sector credit for August was able to lift the currency’s spirits, as the quarterly company operating profits report indicated a 1.9% decline in Q2 as expected.

In Japan, the preliminary industrial production report for July printed a surprise 0.6% decline versus the projected 0.1% uptick. On a more positive note, the previous reading enjoyed a significant upgrade from the initially reported 0.8% gain to an impressive 1.1% increase.

Yen pairs are mostly weaker, with USD/JPY down by 69 pips (-0.58%), GBP/JPY down by 62 pips (-0.32%), and NZD/JPY down by 90 pips (-1.16%). In contrast, EUR/JPY is safely in the green as it advanced by 108 pips (+0.90%) as of this writing.

Can the euro still hold on to its recent forex gains? We’ve got the German retail sales and the flash CPI readings from the euro zone up for release in the upcoming London trading session. Switzerland is set to print its KOF economic barometer and might show a climb from 99.8 to 99.9, possibly shoring up demand for European currencies in the next few hours even while U.K. traders are off enjoying the bank holiday.

See also:

U.S. Session Recap

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