Asian Session Forex Recap – Dec. 3, 2015

  • Japan Markit services PMI down from 52.2 to 51.6 in November
  • AU AIG services PMI: 48.2 vs. 48.9 previous
  • AU trade shows 3.31B AUD deficit vs. 2.6B AUD deficit expected, 2.32B AUD deficit previous
  • AU HIA new home sales: -3.0% vs. -4.0% previous
  • China Caixin/Markit services PMI: 51.2 vs. 53.1 expected, 52.0 previous
  • Fonterra: global dairy prices gives us more confidence on payout

The dollar gained a couple of pips on its counterparts, thanks to Asian session forex traders pricing in Yellen’s hawkish comments and taking profits ahead of the ECB decision.

Major Events:

AU trade balance – Trade data from the Land Down Under surprised to the downside due to fewer exports. Its deficit widened from a revised 2.40B AUD to 3.31B AUD in October. Analysts were only expecting a deficit of 2.60B AUD.

A closer look reveals that exports fell by a seasonally adjusted 3% after showing a 6% drop in minerals and metals exports such as gold. Guess non-mining sectors aren’t covering for weaknesses in the mining industry enough!

Snoozer before the ECB decision – With the ECB’s monetary policy decision only a few hours away, some forex traders are squaring some of their positions. Other traders though, still priced in Yellen’s hawkish comments from yesterday’s U.S. session.

The Asian markets stopped for a break with Shanghai index up by 0.59%, Nikkei down by 0.20%, Hang Seng down by 0.27%, and Australia’s ASX down by 0.57%.

Major Currency Movers:

USD – The Greenback continued to find support from Yellen’s hawkish comments from the previous session. It also didn’t hurt that some forex traders took profits from their higher-yielding bets.

EUR/USD is down 26 pips (-0.25%), GBP/USD is down 10 pips (-0.07%), USD/JPY is up by 24 pips (+0.20%), and USD/CHF inched 17 pips higher (+0.17%).

AUD – The Aussie started the session on the red side of the charts after Australia printed a disappointing trade balance report. The comdoll was able to recover its losses though, with AUD/USD popping up by 10 pips (+0.14%) and AUD/JPY rising by 28 pips (+0.31%).

NZD – Like the Aussie, the Kiwi rose up the charts despite a weak Chinese services PMI report. One possible reason is Fonterra’s optimism, as it said that the recent dairy prices is giving it confidence on milk payouts. NZD/USD paused the session with a 22-pip gain (+0.33%) while NZD/JPY also rose by 41 pips (+0.50%).

Watch Out For:

  • 8:15 am – 9:30 am GMT: Spanish and Italian services PMIs and French and German final services PMIs. Generally expected to print slightly higher numbers compared to last month.
  • 9:30 am GMT: U.K. services PMI (55.1 expected vs. 54.9 previous)
  • 10:00 am GMT: Euro Zone retail sales (0.2% expected vs. -0.1% previous)
  • 12:45 pm GMT: ECB monetary policy decision
  • 1:30 pm GMT: ECB press conference. Watch out for any hints of further easing!

See more:

U.S. Session Forex Recap

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