Asian Session Forex Recap – Nov. 3, 2015

  • RBA keeps rates at 2.0% as expected
  • RBA: inflation outlook affords scope for further easing
  • NZ ANZ commodity prices: 6.9% vs. 5.5% previous
  • Japanese markets out on Culture Day holiday
  • UK construction PMI expected to print at 58.8 vs. 59.9 previous

Forex trading was thin during the Asian session, as a lack of major reports and a Japanese holiday focused investor attention to just the RBA’s decision.

Major events:

RBA’s policy decision – The Reserve Bank of Australia (RBA) published its decision to keep its interest rates at 2.00%. Though the move was widely expected, it was still a relief for forex bulls to see that the accompanying statement wasn’t as dovish as expected.

Glenn Stevens and his gang hinted that further weaknesses in inflation could lead to further easing but the overall tone of the RBA was not as dovish. For one thing, it expressed its optimism over Australia’s moderate expansion and improvement in business conditions as well as the steady employment rate.

Japan on a market holiday – This, coupled with many Australian traders likely watching the Melbourne Cup, made for a thin trading environment for forex traders. Watch out for volatility possibly returning during the London session.

Major Currency Movers:

AUD – No surprise that the high-yielding currency would get support from a less-dovish-than-expected RBA decision. AUD/USD is up 69 pips (+0.97%) while AUD/JPY is up by 75 pips (+0.87%) throughout the session. AUD/NZD is also up by 82 pips (+0.77%) and EUR/AUD is down by a whopping 133 pips (-0.86%) to 1.5293.

USD– Lost a few pips against the comdolls and its fellow low-yielding currencies. Maybe due to profit-taking from the U.S. session’s gains? USD/JPY slipped by 10 pips (-0.08%) while USD/CHF inched 2 pips lower. USD/CAD also fell by 17 pips (-0.13%) and NZD/USD popped up by 13 pips (+0.19%).

Watch out for:

Spanish unemployment change at 8:00 am GMT
UK construction PMI at 9:30 am GMT
NZ dairy auction will begin at 12:00 pm GMT

See more:

U.S. Session Recap

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