Asian Session Forex Recap – Dec. 1, 2015

  • AU building approvals: 3.9% vs.-2.5% expected, 2.3% previous
  • AU current account: -18.1B AUD vs. -16.4B AUD expected, -20.5B AUD previous
  • China manufacturing PMI: 49.6 vs. 49.8 expected and previous
  • China non-manufacturing PMI: 53.6 vs. 53.1 previous
  • China Caixin manufacturing PMI: 48.6 vs. 48.3 expected and previous
  • RBA keeps policies steady in December
  • Dollar slides against its counterparts

The dollar lost ground against its forex counterparts despite mixed reports from Australia, Japan, and China. How did the major currencies trade?

Major Events:

RBA keeps policies unchanged in December – The Reserve Bank of Australia (RBA) kept its rates unchanged at 2.0% for a seventh month in a row in December, a widely expected move by the market players. However, the central bank also kept its warning that there is scope for further easing should the economy need it. Forex traders mostly shrugged off the event, probably because RBA Governor Glen Stevens also expressed his optimism that though the economy is still performing slightly below projections, the performance of non-mining sectors are showing improvements.

China PMIs – Data printed during the Asian session showed that manufacturing activity in China weakened to a three-year low in November. Manufacturing PMI clocked in at 49.6, the lowest reading since August 2012, when analysts were expecting a reading of 49.8. The Caixin PMI reading, a report with a smaller sample size, mitigated some of the reaction with a slightly better-than-expected reading. Forex traders haven’t sold the comdolls like there’s no tomorrow thanks in part to overall dollar strength and strong Australian reports earlier in the day.

Major Currency Movers:

USD – The Greenback’s mixed price action turned into bloodbath during the Asian session, thanks to mixed reports from Australia and China. EUR/USD popped up to a high of 1.0597 before settling at 1.0574 while USD/JPY hit a low of 122.64 before coming back up to 122.95.

AUD and NZD – The Aussie found support from a less-dovish-than-expected RBA policy statement and slight upward surprises in Australia’s economic reports. Even the Kiwi shrugged off weak Chinese PMI reports, likely due to optimism ahead of today’s dairy auctions.

AUD/USD rose to .7284 from its .7234 open price while AUD/JPY also jumped from 89.07 to reach 89.46 before settling down to 89.29. Meanwhile, NZD/USD rose from .6585 to a high of .6674 before settling to .6624 while NZD/JPY is 37 pips higher than its open price.

Watch Out For:

  • 7:00 am GMT UK bank stress test results
  • 7:00 am GMT BOE financial stability report
  • 8:00 am GMT Speech by BOE’s Carney. Watch out for any less-than-hawkish rhetoric!
  • 8:15 am GMT Switzerland retail sales (0.4% expected vs. 0.2% previous)
  • 9:30 am GMT UK manufacturing PMI (expected to remain at 52.8)

See more:

U.S. Session Forex Recap

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