Asian Session Forex Recap – Mar. 4, 2016

  • Japan average cash earnings up by 0.4% in January vs. 0.2% uptick expected, 0.2% decline in December
  • Australia’s retail sales up by 0.3% vs. 0.4% increase expected, 0.0% growth in December
  • NFP report due for release in the U.S. session

Forex traders were big risk-takers during the Asian session, as they pushed high-yielding currencies higher despite mixed reports printed during the session.

Major Events:

Australia’s retail sales report – Up, up, and… nope! The Land Down Under fell short at striking three when its retail sales report missed its estimates. If you recall, the Aussie bulls had been having a good week following a less dovish-than-expected RBA decision and better-than-expected trade data from Australia.

This time the Land Down Under printed its retail sales data, which showed a 0.3% uptick in January. This marked an improvement against December’s flat growth, and supported the RBA’s optimism on the economy. The Aussie didn’t jump as much as it could have though, probably because traders had been expecting a 0.4% uptick for the month.

No more BOJ easing…for now – Bank of Japan (BOJ) Governor Haruhiko Kuroda made some waves in the forex arena today when he said that the central bank isn’t looking to deepen its negative interest rate policy.

In his speech, Kuroda hinted that the triple threat of quantitative and qualitative easing, as well as the negative interest rates would be enough to push Japan’s inflation to its 2.0% targets. If you recall, the central bank had just imposed the negative rates policy in late January.

Small rallies ahead of the NFP report
– Market players were unstoppable with their risk appetite, as they pushed high-yielding investments a few notches higher ahead of the U.S. NFP report.

Apparently, investors were buoyed by reports of declining oil production in the U.S. and the possibility of U.S. shale producers being edged out by the low cost of oil prices. Not surprisingly, the Asian equities markets ended the day in the green. Read Forex Gump’s NFP trading guide if you’re planning on trading the monster report!

Major Currency Movers:

JPY –It was a seesaw day for the yen, as it gained on its counterparts on Kuroda’s hawkish speech and then erased its session gains on the back of overall risk appetite.

USD/JPY fell to 113.25 before recovering to 113.70 while EUR/JPY dropped to 123.94 before rising back up to 124.46. Ditto for GBP/JPY, which slipped to 160.46 before recovering to 160.97.

USD – The Greenback had a mixed day against its major counterparts as it gained on the European currencies but fell back against the yen and the comdolls.

EUR/USD inched 9 pips lower (-0.08%) and GBP/USD slipped by 16 pips (-0.11%) but AUD/USD popped up by 10 pips (+0.14%) and NZD/USD rose by 22 pips (+0.33%).

Watch Out For:

  • 9:10 am GMT: Euro Zone retail PMI to improve from last month’s 48.9 figure?

See more:

U.S. Session Forex Recap

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