Asian Session Forex Recap – Nov. 6, 2015

  • AU AIG construction PMI: 52.1 vs. 51.9 previous
  • Japan’s leading indicators: 101.4% vs. 102.1% expected, 103.5% previous
  • RBA hints at further easing
  • BOJ’s Kuroda: economic fundamentals “remain solid”

Trading volatility was thin during the Asian session, as forex traders gear up for today’s NFP report. So how did the major currencies trade?

Major events:

Slightly dovish RBA outlook – In its quarterly outlook report, the RBA shared its confidence on economic growth but hinted that the low inflation could pave the way for more easing. The central bank pointed to several indicators including employment and trade numbers, saying that conditions had firmed in the past months. However, the RBA is also seeing inflation at around 2.0% for most of 2016, a level that’s right at the bottom of its target range. With Australia’s inflation outlook as bleak as my chances at basketball stardom, it makes sense for the RBA to say that it may afford “scope for further easing.” Yikes!

Speech by BOJ’s Kuroda – Not much news from the BOJ head honcho, except for more assurances that inflation will meet its target 2.0% because they will continue its QQE program until it happens. Kuroda also expressed concerns over the impact of slowdown in emerging economies on Japan but kept his overall optimism, saying that Japan’s economic fundamentals remain solid.

All eyes on the NFP report – As with most NFP days, volatility was thin across the markets. Australia’s S&P/ASX traded higher after yesterday’s slide while Japan’s Nikkei advanced on a weaker yen as USD/JPYO flirts with its two-month highs. Meanwhile, China’s indices were mixed with Shanghai Composite index rising by 0.54% while Hong Kong’s Hang Seng Index is down by almost 1.0%.

Major Currency Movers:

USD  – The Greenback stepped back by a few pips against its counterparts, possibly on prof-taking ahead of today’s monster NFP report. EUR/USD was 4 pips higher while USD/JPY ended mid-Asian session trading 10 pips higher after falling to a low of 121.63.

AUD – Surprisingly enough, the Aussie didn’t get much action despite the RBA’s dovish report. AUD/USD remained tight just below .7150 while AUD/JPY was stuck at 87.00 and EUR/AUD was contained above 1.5100.

Watch out for:

  • German industrial production at 7:00 am GMT
  • U.K. manufacturing production, trade balance, and industrial production at 9:00 am GMT (Will worse-than-expected reports dig a deeper grave for the pound today?)

See more:

U.S. Session Recap

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