Asian Session Forex Recap – Feb. 24, 2016

  • Japan’s leading indicators revised higher from 102.0 to 102.1
  • Australia’s construction work done (q/q) falls by 3.6% vs. 2.1% downtick expected, 1.8% decline last month
  • Australia’s wage price index (q/q) up by 0.5% vs. 0.6% expected and previous
  • PBoC sets USD/CNY mid-point fix to its highest in three weeks

Forex bears came out to play today, as they priced in weaker commodity prices and a bit of risk aversion across the board.

Major Events:

Triple roundhouse kick for oil prices – As I mentioned in my U.S. session recap, oil prices received a triple roundhouse kick yesterday when Iran’s oil minister ridiculed the notion of output freezes. Saudi Arabia’s oil minister then joined the mix when said that production cuts “are not going to happen.”

Last but definitely not the least was a stockpile report showing even more buildup in supply. The Black Crack extended its losses during the Asian session with U.S. oil slipping by 2.23% to $31.6 and Brent crude oil dropping by another 1.23% to $32.86. Not surprisingly, the Asian equities (and forex) markets also danced to the risk aversion beat.

PBoC devalues the yuan further – The People’s Bank of China (PBoC) set its USD/CNY mid-point fix at 6.5302 today, 0.4% higher than its fix yesterday. If you recall, the government is fighting against capital flight on the back of concerns over China’s economic growth. Now that the yuan is at its weakest against the dollar in almost three weeks, some businesses could scale back from investing their capital outside of China.

Major Currency Movers:

JPY – The low-yielding yen clobbered its counterparts thanks to a risk averse environment.

USD/JPY slipped by another 29 pips (-0.26%), EUR/JPY dropped by 25 pips (-0.20%), and GBP/JPY plummeted by a whopping 83 pips (-0.53%).

Comdolls – We can’t talk about declining commodity prices without talking about the comdolls.

AUD/USD lost 36 pips (-0.50%), USD/CAD popped up by 49 pips (+0.37%), and NZD/USD dropped by 44 pips (-0.66%).

Watch Out For:

  • 7:00 am GMT: Swiss UBS consumption indicator
  • 9:30 am GMT: U.K.’s BBA mortgage approvals (45.2K expected vs. 44.0K previous)
  • 11:00 am GMT: U.K.’s CBI realized sales expected to remain at 16

See more:

U.S. Session Forex Recap

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