Asian Session Forex Recap – Dec. 15, 2015

  • AU house price index (q/q): 2.0% vs. 2.1% expected, 4.7% previous
  • AU new motor vehicle sales: 1.0% vs. -3.7% previous
  • RBA in no hurry for further rate cuts
  • PBoC devalues yuan for a seventh day in a row
  • No revisions to Japan’s industrial production, remains at 1.4%
  • Japan tertiary industry activity: 0.9% vs. 0.5% expected, -0.4% previous

The dollar gave up pips to its counterparts, as a bit of improvement in risk sentiment got mixed in with forex traders squaring their positions ahead of this week’s Fed event.

Major Events:

RBA meeting minutes – In its latest meeting, the Reserve Bank of Australia (RBA) recognized that its low interest rates is helping to boost household spending while a lower exchange rate, one that has adjusted to falling commodity prices, is helping Australia’s local companies. The central bank wasn’t all rainbows and unicorns though, as RBA still maintained that a subdued inflation provides scope for further easing.

PBoC devalues yuan further – Let there be currency weakness! For a seventh day in a row, the People’s Bank of China (PBoC) devalued the yuan’s mid-rate fix against the dollar. The renminbi is now at its new four-year low after the central bank dropped its fix by another 0.1% to 6.4559 per dollar. Will this lead to more stimulus from the government in the near future?

Dollar weakness continues – As I mentioned in my U.S. session recap, the Greenback has been taking hits from traders who are taking off their long dollar trades ahead of this week’s FOMC statement. Unless you’ve been living under a rock, you should know that market players are widely expecting the central bank to raise its interest rates for the first time in years this week.

Major Currency Movers:

USD – The dollar fell across the board on a bit of improvement in risk sentiment and profit-taking ahead of the Fed event. EUR/USD is up by 23 pips (+0.21%); USD/JPY hit a barrier at 121.18 and is now at 120.94; GBP/USD is up by 29 pips (+0.19%), and USD/CHF is down by 21 pips (-0.21%).

AUD – The Aussie barely reacted to the RBA’s less-dovish-than-expected meeting minutes. AUD/USD is up by 3 pips after hitting a session high at .7283 while AUD/JPY hit resistance at 88.00 and is now trading around 50 pips below the level.

Watch Out For:

  • 9:30 am GMT: U.K. annualized CPI (0.1% expected vs. -0.1% previous)
  • 9:30 am GMT: U.K. annualized core CPI (1.2% expected vs. 1.1% previous)
  • 9:30 am GMT: U.K. input prices (-1.0% expected vs. 0.2% previous)
  • 9:30 am GMT: U.K. output prices (-0.1% expected vs. 0.0% previous)
  • 10:00 am GMT: German ZEW economic sentiment (15 expected vs. 10.5 previous)
  • 10:00 am GMT: Euro Zone ZEW economic sentiment (34.4 expected vs. 28.3 previous)
  • 10:00 am GMT: Euro Zone quarterly employment change (0.2% expected vs. 0.3% previous)

See more:

U.S. Session Forex Recap

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