Asian Session Forex Recap – Oct. 29, 2015

  • RBNZ kept rates unchanged at 2.75% as expected:
  • RBNZ Gov Wheeler: Some further easing seems likely
  • Japanese preliminary industrial production up 1.0% in Oct
  • Australian HIA new home sales down by 4% in Sept
  • Australia’s import prices up by 1.4% in Q3 vs. 1.6% forecast
  • German and Spanish flash CPI readings due
  • Germany to report 4K drop in joblessness?

Commodity currencies were down in the dumps today, thanks to a dovish RBNZ statement and a couple of bleak reports from Australia. While the New Zealand central bank decided to keep interest rates on hold at 2.75% for the time being, head honcho Graeme Wheeler ‘fessed that some further easing seems likely.

In stark contrast to the earlier FOMC statement which had most forex junkies pricing in expectations of a December rate hike, the RBNZ announcement pretty much sealed the deal for another 0.25% cut before the end of the year. RBNZ policymakers seemed unimpressed by the latest surge in dairy prices and the green shoots in economic data, citing that it’s too early to tell if these improvements can be sustained.

NZD/USD is down 37 pips to .6662 (-0.55%), NZD/JPY is down 66 pips to 80.45 (-0.81%), EUR/NZD is up 111 pips to 1.6415 (+0.68%), and GBP/NZD is up 140 pips near the 2.2900 mark (+0.62%).

In Australia, the quarterly import prices report printed a 1.4% increase instead of the estimated 1.6% gain in Q3 2015. This was followed by a downbeat HIA new home sales report, which indicated a 4% drop in September. Keep in mind that the top banks in the country recently increased mortgage rates in order to prevent any housing bubbles from forming or bursting.

AUD/USD is struggling to keep its head above the .7100 handle (-0.13%), AUD/JPY is down 34 pips to 85.78 (-0.39%), EUR/AUD is up 46 pips to 1.5400 (+0.31%), and GBP/AUD is up 45 pips to 2.1480 (+0.21%).

As you’ve probably noticed, the Japanese yen is able taking advantage of the risk-off mood, as Japan just printed a stronger than expected 1.0% gain in industrial production for October. This is just preliminary data, though, which means that revisions are still likely later on.

Up ahead, forex traders will turn their attention to the preliminary CPI readings from Germany and Spain, as these could provide some clues on how the region’s inflation estimates for the month might turn out. Germany is slated to show a 0.1% decline in price levels while Spain could print a 0.6% drop, with weaker than expected results likely to trigger another leg lower for the euro.

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U.S. Session Recap

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