Asian Session Forex Recap – Mar. 17, 2016

  • Japan’s trade surplus clocks in at 0.17T JPY vs. 0.24T JPY expected, 0.07T previous
  • Australia’s unemployment rate drops from 6.0% to 5.8%
  • Australia’s employment change shows 0.3K gain vs. 11.6K uptick expected, 7.4K decline in January

Risk appetite dominated the Asian forex trading session, as traders took their cues from yesterday’s FOMC statement.

Major Events:

Japan’s trade data – The Land of the Rising Sun printed its biggest trade surplus in four years thanks to weak oil prices limiting imports and a strong yen boosting the value of its exports.

Data released earlier revealed that exports fell by 4.0% from a year earlier, which was offset by a whopping 14% drop in imports in February. This yielded a trade surplus of 242.8B JPY, much better than the 648.8B JPY deficit in January. However, some analysts are concerned that exports to the U.S., a previously dependable shield against lower demand from China, have declined for a 10th month in a row. Duhn duhn duhn.

Australia’s employment numbers – The Land Down Under was also under the spotlight today, thanks to its headline employment numbers printing better than expected. The unemployment rate fell from 6.0% to 5.8% in February with 15,900 gains in full-time jobs offsetting the 15,600 part-time jobs lost.

The Aussie bulls attacked at the release of the report, though some traders held back when they found out that the unemployment drop was mostly due to the participation rate slipping by 0.2% to 65.9%. Overall it was still a good day for Australia’s jobs sector and the report was enough to entice enough currency bulls to push the Aussie higher.

FOMC statement hangover – Asian session traders picked up the momentum from their U.S. session counterparts, as they pushed high-yielding investments like equities and higher-yielding currencies higher across the board. In case you’ve been busy watching Netflix, you should know that the Fed’s dovish hints from yesterday encouraged risk-taking, as it hinted that the central bank won’t cut its economic stimulus further anytime soon.

Major Currency Movers:

USD – The dollar’s performance was a mixed bag of nuts, as it lost against the yen and comdolls but steadied against its European counterparts.

EUR/USD slipped by 12 pips (-0.11%), USD/JPY fell by 51 pips (-0.45%), while GBP/USD didn’t move from the 1.4250 area.

JPY – The low-yielding yen had a good day across the board despite an overall risk-on vibe. One possible explanation is another speech from Kuroda where he repeated the possibility that the BOJ could still drag its interest rates deeper into negative territory. Another is the Nikkei’s strong performance dragging the yen’s demand (and therefore price) higher.

EUR/JPY plunged by 72 pips (-0.57%), GBP/JPY declined by 119 pips (-0.75%), and AUD/JPY slipped by 8 pips (-0.09%).

Comdolls – Commodity-related currencies clobbered the dollar on a post-FOMC buying spree and overall risk-taking.

AUD/USD popped up by 30 pips (+0.40%), USD/CAD fell by another 17 pips (-0.13%), and NZD/USD shot up by 31 pips (+0.46%).

Watch Out For:

  • 2:45 am GMT: SECO economic forecasts
  • 4:15 am GMT: Switzerland PPI (0.2% expected, -0.4% previous)
  • 4:30 am GMT: SNB prints its first policy decision in 2016. Watch out for any jawboning!
  • 5:00 am GMT: Italian trade balance (4.33B EUR expected vs. 6.03B EUR previous)
  • 6:00 am GMT: Euro Zone final CPI to remain at -0.2?
  • 6:00 am GMT: Euro Zone trade balance (20.2B EUR expected vs. 21.0B EUR previous)
  • 8:00 am GMT: BOE monetary policy decision. No changes are expected, but keep your eyes peeled for any news that might affect the pound’s volatility.

See more:

U.S. Session Forex Recap

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