Asian Session Forex Recap – Nov. 19, 2015

  • No changes to the BOJ’s policies
  • Japan trade surprisingly shows surplus, 111.5B JPY vs. 246.3B JPY deficit expected
  • Japan all industries activity: -0.2% vs. 0.2% expected, -0.1% previous

The dollar scored for another trading session, thanks to forex traders pricing in a December Fed rate hike and overall risk aversion in the markets.

Major Events:

More dollar selling – Asian session forex traders caught up to their U.S. counterparts after the latter sold the Greenback like there’s no tomorrow following the release of the FOMC minutes. As mentioned in the U.S. session recap, the Fed all but approved a rate hike in December when it printed that it expects Uncle Sam to meet its conditions by next month.

Japan’s trade data – The Land of the Rising Sun surprisingly printed a surplus in October though the details aren’t all rainbows and unicorns. For starters, the surplus came from imports falling faster than exports.

Imports dropped by 13.4% from the previous year and clocked in its 10th consecutive decline. Meanwhile, imports fell by 2.1%, its first decline since August 2014. Details reveal that a weak yen and weak demand from China weighed on Japan’s trade activities.

BOJ’s policy decision – As expected, the Bank of Japan (BOJ) kept its policies steady for another month. It should be noted though, that the central bank also said that its inflation expectations are showing some “weak developments.” Will this mean a longer period of QQE for Japan?

Major Currency Movers:

USD – Whether Asian session forex traders catching up or it’s stop losses getting triggered, the dollar lost more pips against its counterparts. EUR/USD is up 66 pips (+0.62%), GBP/USD is up 56 pips (+0.37%), and USD/CHF is down 43 pips (-0.42%).

JPY – A bit of risk-taking in the markets, a slightly dovish BOJ release, and a not-so-awesome trade data from Japan weighed on the low-yielding yen. USD/JPY is down 32 pips (-0.26%) but EUR/JPY popped up by 48 pips (+0.37%), GBP/JPY rose by 20 pips (+0.11%), and CHF/JPY is up by 19 pips (+0.16%).

Comdolls – Weaknesses of its low-yielding counterparts helped boost high-yielding currencies like the comdolls. AUD/USD rocketed by 74 pips (+1.04%) and AUD/JPY popped up by 69 pips (+0.79%) while NZD/USD zoomed 86 pips higher (+1.33%) and NZD/JPY rose by 88 pips (+1.10%).

Watch Out For:

  • 7:00 am GMT Switzerland trade balance (3.18B surplus expected vs. 3.05B previous)
  • 9:00 am GMT Euro Zone current account (18.3B expected vs. 17.7B previous)
  • 9:30 am GMT UK retail sales report. Read Forex Gump’s piece for a trading guide!
  • 11:00 am GMT CBI industrial order expectations

See more:

U.S. Session Recap

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