Asian Session Forex Recap – Feb. 2, 2016

  • RBA keeps rates unchanged at 2.00% as expected
  • New Zealand ANZ commodity prices down by 2.3% vs. 1.8% downtick last month
  • Japan monetary base slips to 28.9% vs. 28.3% expected, 29.5% previous

A pretty good day for the low-yielding currencies, as forex traders priced in lower oil prices and overall risk aversion. Which market themes dominated the session anyway?

Major Events:

RBA keeps rates unchanged – As Forex Gump speculated in his RBA trading guide, the Reserve Bank of Australia (RBA) did keep its interest rates unchanged at 2.00%. The central bank sounded optimistic about the Australian economy, saying that the non-mining sector has strengthened in 2015 even as spending in the mining sector has continued its decline.

Among other things the RBA also mentioned improvements in business conditions and lending, as well as developments in the employment sector. However, the central bank also cautioned against the potential impacts of volatility in the global markets and uncertainty over its growth. Inflation also remains subdued, and warrants further scope for easing should it become necessary.

Gold up, oil down – The Black Crack’s weakness from the U.S. session extended to the Asian markets, thanks to more speculations that the OPEC can’t do anything about the recent oil price declines. Brent crude is down by 1.99% to $33.61 while WTI is down by 2.07% to $31.02.

Meanwhile, a dovish speech by Fed’s Fischer continued to weaken the dollar’s safe haven appeal and pushed gold prices higher on the day. The yellow metal is at $1,1126.50 after hitting a three-month high of $1,130.8 earlier in the day.

Major Currency Movers:

AUD and NZD – Unfortunately for the Aussie and Kiwi bulls, the forex bears came to work ready for battle today. Aside from lower oil prices, traders zeroed in on the RBA’s concerns over volatility and growth in the global markets and pushed the comdolls lower across the board.

AUD/USD hit a session high of .7129 but is down 22 pips (-0.31%) on the session while AUD/JPY is also down by 63 pips (-0.73%). The Kiwi tracked the Aussie’s losses and logged a 26-pip loss (-0.33%) against the yen and erased all of its intraday gains against the Greenback.

CAD – We can’t talk about oil and not talk about the oil-related Loonie! USD/CAD is 60 pips (+0.43%) higher on the session while CAD/JPY registered a 75-pip loss (-0.86%). Heck, even EUR/CAD popped up by 97 pips (+0.64%)!

USD and JPY – The risk aversion theme was good business for low-yielders like the Greenback and the yen. EUR/JPY fell by 29 pips (-0.22%), GBP/JPY slipped by 123 pips (-0.71%), and USD/JPY dropped by 50 pips (-0.41%). The dollar also snuck in a few pips with GBP/USD falling 39 pips (-0.27%) lower.

Watch Out For:

  • 3:00 am GMT: Spanish unemployment change expected to reflect +71.2K vs. -55.8K previous
  • 3:15 am GMT: Switzerland retail sales (y/y) to drop by 1.3% vs. 2.1% decline last month?
  • 3:55 am GMT: German unemployment change (-7K expected vs. -14K last month)
  • 4:00 am GMT: Italian unemployment rate to slip to 11.2% vs. 11.3% last month?
  • 4:30 am GMT: U.K. construction PMI expected to print at 57.6 vs. 57.8 last month
  • 5:00 am GMT: Euro Zone unemployment rate estimated to remain at 10.5%
  • 5:00 am GMT: Euro Zone PPI expected to drop by 0.4% after slipping by 0.2% last month

See more:

U.S. Session Forex Recap

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