Asian Session Forex Recap – Feb. 17, 2016

  • AU Westpac leading index clocks in at 0.0% vs. 0.3% decline last month
  • Dovish Rosengren weighs on the dollar

It was a mixed trading session for forex traders, as bearish reports clashed with weaknesses in low-yielding currencies.

Major Events:

Risk aversion weighs on high-yielding currencies – Asian markets received a one-two punch today, starting with the PBoC raising the USD/CNY fix from 6.5130 to 6.5237. Not a good move to convey optimism especially after China has just released a weak trade data. The second punch came from oil prices, as oil traders remain underwhelmed by the agreement between Saudi Arabia and Russia to freeze oil production. Brent crude oil is only starting to recover with a 0.09% gain after seeing losses for most of the day while U.S. oil is still down by 0.22% to $28.98.

All eyes on the FOMC minutes – Not helping volatility and risk-taking today is the anticipation ahead of the Fed’s meeting minutes. Remember that market players are already expecting the Fed to cool down from its hawkish stance after it raised its rates in December.

Boston Fed President Eric Rosengren already gave the markets a taste of what could possibly come. In a conference just a few hours ago, Rosengren stressed that the continued decline in oil prices, increased global financial market volatility, and weaker inflation prospects should be considered by the Fed. More specifically, the central bank should adopt a more gradual approach (read no rate hikes in the near future) in making its policy decisions. Duhn duhn duhn.

Major Currency Movers:

USD – Not surprisingly, the Greenback lost pips across the board at the prospect of a dovish FOMC meeting minutes.

USD/JPY hit a session high of 114.40 before settling down to 113.71 while EUR/USD shot up by 54 pips (+0.49%) and USD/CHF slipped by 19 pips (-0.19%).

JPY – The onslaught of risk aversion brought the low-yielding yen back in Vogue. EUR/JPY hit a high of 127.32 before closing at 126.99 while GBP/JPY also fell by 16 pips (-0.10%) and AUD/JPY got knocked down from 81.40 to 80.62.

Watch Out For:

  • 9:30 am GMT: U.K.’s employment numbers. Watch out for earnings numbers! Read Forex Gump’s trading guide if you’re planning on trading this report.
  • 10:00 am GMT: Switzerland ZEW economic expectations

See more:

U.S. Session Forex Recap

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