Asian Session Forex Recap – Jan. 11, 2016

  • Japan on Coming of Age Day bank holiday
  • AU ANZ job ads: -0.1% vs. 1.1% previous
  • South African rand falls to fresh lows
  • Chinese equities fall further without much impact on currencies

Price action was a mixed bag of nuts during the Asian session, as forex traders cooled down from their selling frenzy.

Major Events:

Rand falls to historic lows – I don’t always write about the South African Rand but when I do, it’s because the currency has fallen to historic lows. The biggest story of the hour was the currency dropping by at least 10% against the dollar during the session. USD/ZAR started the day with a 9.96% jump to 18.0569 before settling back down to 16.6710. Market players are still scratching their heads looking for the catalyst but the closest contenders are Japanese traders exchanging their holdings to the more liquid dollar.

More weaknesses in equities – Chinese equities started another week in the red, as last week’s concerns continued to loom over risk appetite. It also didn’t help that China’s inflation numbers over the weekend just missed market expectations. The PBoC wasn’t much help either, as its second consecutive strengthening of the yuan via the USD/CNY midpoint fix failed to encourage risk appetite among Chinese traders.

Nikkei lost 0.40%; Hang Seng dropped by at least 2.50% and ASX fell by 1.30% while the Shanghai Composite slipped by 2.40% and Shenzhen’s CSI300 index fell by 1.79%.

Major Currency Movers:

AUD – The Aussie mostly shrugged off more weaknesses in China, possibly due to traders already pricing in such gloom and doom last week. AUD/USD fell to a low of .6928 before recovering to .6977 while AUD/JPY touched a low of 80.91 before inching 100 pips higher to 81.90.

NZD – Kiwi bears weren’t able to shrug off concerns over China as easily as Aussie traders had. NZD/USD fell by 29 pips (-0.44%) throughout the session while NZD/JPY also dropped by 24 pips (-0.31%).

JPY – The yen clocked in another positive day in the charts despite the absence of our Japanese friends. Yen crosses gapped lower over the weekend with pairs like USD/JPY, EUR/JPY and GBP/JPY barely recovering from their low open prices.

Watch Out For:

  • 8:15 am GMT: Swiss retail sales (0.3% expected vs. -0.8% previous)
  • 9:30 am GMT: Sentix investor confidence (11.5 expected vs. 15.7 previous)

See more:

U.S. Session Forex Recap

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