Asian Session Forex Recap – Nov. 17, 2015

  • NZ inflation expectations remains at 1.9% for Q4 2015
  • RBA upbeat on the economy but still leaves scope for further easing
  • Asian equities rebound as risk appetite returns

Dollar domination was the name of the game during the Asian session, as forex traders caught up to yesterday’s currency moves. Here are the major headlines.

Major Events:

RBA meeting minutes – The Reserve Bank of Australia (RBA) was the only major report on the docket, so it wasn’t surprising that it got tons of attention. The central bank was upbeat with its prediction that the economy would “strengthen gradually.” It cited the contribution of a weak currency on growth as well as stronger-than-expected growth in the employment and household and business service sectors.

However, the RBA also warned that global economic weaknesses have been more persistent than expected and that a slowdown in China is likely to keep commodity prices subdued in the near future. Overall the RBA’s minutes are convincing analysts that a rate hike isn’t likely to happen in December, which lent support to the Aussie.

Dollar domination – With no other data on the roster, Asian session forex traders caught up to their U.S. counterparts. Dissipating concerns over the impact of Paris’ attacks prodded traders back to their U.S. equities investments and boosted demand for the Greenback.

Risk appetite in the Asian equities markets – Unlike the dollar, risk appetite didn’t translate to gains for the higher-yielding currencies, as gains in the Asian markets weren’t enough to ply traders away from the Greenback. The Asian markets closed for lunch break with Nikkei up by 1.53%, Australia’s S&P ASX up by 1.77%, and Hong Kong’s Hang Seng up by 0.30%.

Major Currency Movers:

USD – EUR/USD is down 16 pips (-0.15%), GBP/USD is down 17 pips (-0.11%), USD/JPY is up by 13 pips (+0.11%), and USD/CHF is up by 10 pips (+0.10%).

AUD –The Aussie fought the dollar’s onslaught after the RBA minutes with AUD/USD hitting a session high of .7108 (16 pips higher than open price) and AUD/JPY rising to 87.64 (23 pips higher than open price). However, the high-yielding currency was soon dragged back down to .7090 and 87.49 respectively.

Watch Out For:

  • 9:30 am GMT U.K. CPI report (0.1% expected vs. -0.1% previous)
  • 9:30 am GMT U.K. CPI (y/y) (expected to show another 0.1% decline)
  • 9:30 am GMT U.K. PPI input (0.2% expected vs. 0.6% previous)
  • 9:30 am GMT U.K. house price index (y/y) (5.4% expected vs. 5.2% previous)
  • 10:00 am GMT German ZEW economic sentiment (6.7 expected vs. 1.9 previous)
  • 10:00 am GMT Euro Zone ZEW economic sentiment (35.2 expected vs. 30.1 previous)

See more:

U.S. Session Recap

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