Asian Session Forex Recap – Nov. 25, 2015

  • Australian internet skilled vacancies: 0.6% vs. 1.1% previous
  • Australian construction work done q/q: -3.6% vs. -2.0% expected, 1.6% previous
  • Japanese services PPI y/y: 0.5% vs. 0.6% expected, 0.5% previous

The BOJ meeting minutes failed to deliver during today’s Asian forex session, so forex traders turned to commodities for direction instead.

Major Events:

Skittish risk sentiment – Moderate amounts of risk appetite briefly returned during the US session, but was quickly kicked out of the door when the Asian session rolled-in, with the Nikkei 225 closing 0.39% lower to 19,847.58 and the Hang Seng down by 0.41% to 22,494.00 during the forex session. Most market analysts attributed the lack of risk-taking to lingering security jitters over the Russian jet shot down by Turkey yesterday

Commodities rally – Asian equities may be jittery, but commodities rallied during the Asian session on the back of US dollar weakness, with gold up by 0.32% to US$1,078.30 per troy ounce. Oil prices were doing particularly well because of increased tension in the Middle East, according to some analysts, with US crude up by 1.025 to $43.09 per barrel and Brent crude oil up by 0.78% to $46.47 per barrel during the forex session.

BOJ meeting minutes – The BOJ meeting minutes for their October 30 huddle was released earlier. And BOJ officials conceded that exports had been more or less flat “due mainly to the effects of the slowdown in emerging economies, particularly in China.”

Nevertheless, “Business fixed investment had been on a moderate increasing trend” and “business sentiment had generally stayed at a favorable level.” Japan’s economy has also continued to recover moderately and “inflation expectations appeared to be rising on the whole from a somewhat longer-term perspective.”

With regard to overseas economies, one BOJ official noted that commodity exporting economies (e.g. Australia) “had been slowing down due to economic developments in China” while advanced economies are on the path of “self-sustained recovery” due to domestic demand. Some BOJ members expressed concerns that the planned April 2017 sales tax hike may slow economic growth while others expressed doubt on the probability of reaching the 2.0% inflation target within the BOJ’s forecast period.

All in all, BOJ officials avoided talking about what most forex trader really wanted to hear – hints of more easing moves.

Major Currency Movers:

Comdolls – As mentioned above, commodities were on the move, so the comdolls were naturally on the move as well, and ignoring the prevailing risk-off sentiment in the process. Strangely enough, the Loonie was the weakest among the comdolls, even though oil was one of the best performing commodities during the Asian forex session.

NZD/USD was up by 20 pips (+0.31%) to 0.6576, NZD/JPY was up by 15 pips (+0.20%) to 80.48, NZD/CAD was up by 14 pips (+0.17%) to 0.8738

AUD/USD was up by 18 pips (+0.25%) to 0.7271, AUD/CHF was up by 9 pips (+0.13%) to 0.7391, AUD/CAD was up by 8 pips (+0.09%) to 0.9659

USD/CAD was down by 20 pips (-0.16%) to 1.3284, EUR/CAD was down by 2 pips (-0.02%) to 1.4158, GBP/CAD was up by 3 pips (+0.02%) to 2.0065

USD – The Greenback was noticeably soft for most of the forex session, even though there weren’t any catalysts that could help to account for the weakness. It’s possible that Asian forex traders were pricing-in the mixed readings from yesterday. But it’s also possible that investors were unwinding their positions on the Greenback ahead of the Thanksgiving holiday, as some analysts are claiming.

USD/JPY was down by 14 pips (-0.11%) to 122.38, USD/CHF was down by 10 pips (-0.10%) to 1.0160, GBP/USD was up by 24 pips (+0.16%) to 1.5103

Watch Out For:

  • 7:00 am GMT Swiss UBS consumption indicator (1.65 previous)
  • 7:45 am GMT French INSEE consumer confidence (95 expected, 96 previous)
  • 9:30 am GMT UK BBA mortgage approvals (44.5 expected, 44.49 previous)
  • 10:00 am GMT Italian retail sales (0.5% expected, 0.3% previous)
  • 10:20 am GMT RBA Assistant Governor Guy Debelle has a speech in London
  • 12:30 pm GMT UK Autumn Forecast Statement

See more:

U.S. Session Recap

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