Asian Session Forex Recap – Mar. 16, 2016

  • New Zealand quarterly current account shows 2.61B NZD deficit vs. -2.97B NZD expected, -4.74B NZD in Q3 2015
  • Australia MI leading index down by 0.2% vs. 0.1% uptick in January
  • BOJ’s Kuroda: It’s “theoretically possible” for the BOJ to cut rates some more

Ho-hum. A pretty quiet session for the forex traders, as Asian session players wait for the FOMC event before committing to any positions.

Major Events:

New Zealand’s current account numbers – A lower-than-expected current account deficit helped stem the Kiwi’s losses after data released earlier reflected lower dairy prices for the country’s dairy producers.

Current account deficit shrank to 2.6B NZD, lower than Q3 2015’s 4.74B NZD figure. Read Forex Gump’s economic report cheat sheet if you want to know how important current account reports are! Meanwhile, a separate report by the Reserve Bank of New Zealand (RBNZ) showed that the country’s banks remain healthy, at least enough to withstand the decline in dairy prices.

Kuroda’s addendum – Looks like Bank of Japan (BOJ) Governor Kuroda communicated a P.S. to the central bank’s decision earlier this week! In his speech in parliament, the BOJ head honcho said that it’s “theoretically possible” for the central bank to drag its rates deeper into negative territory (-0.5%, to be exact). Recall that market players weren’t impressed with the BOJ’s decision to keep its policies, as it lacked the commitment that investors had been looking for.

It’s also “theoretically possible” for the BOJ to include a circus performance in its next policy decisions, but for now yen traders are taking Kuroda seriously. The yen lost pips against most of its counterparts on the prospect of more easing from the BOJ.

All eyes on the FOMC statement – As I mentioned yesterday, all eyes are tuning in to the Fed’s monetary policy decision due in a couple of hours. Forex Gump has the details on what’s expected of them, but for now it seems like the major currencies aren’t going anywhere far until the Fed prints its decisions.

Major Currency Movers:

JPY – The yen lost pips across the board following Kuroda’s threats of deeper negative interest rates.

USD/JPY is up by 34 pips (+0.30%), EUR/JPY is up by 28 pips (+0.22%), and GBP/JPY inched 32 pips higher (+0.20%).

Comdolls – Commodity-related currencies got knocked back by a few tiny pips thanks to the PBoC weakening the yuan further and commodities declining throughout the session.

AUD/USD lollygagged just above the .7450 area while USD/CAD also stayed within the 1.3350 levels. Meanwhile, NZD/USD fell to a session low of .6577 before recovering to .6601.

Watch Out For:

  • 9:30 am GMT: U.K. (3m/y) average earnings index (2.0% expected, 1.9% previous)
  • 9:30 am GMT: U.K. claimant count change (-8.8K expected, -14.8K previous)
  • 9:30 am GMT: U.K. unemployment rate expected to remain at 5.1%. Read Forex Gump’s trading guide to and see why and how you can trade the event!

See more:

U.S. Session Forex Recap

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