Asian Session Forex Recap – Mar. 31, 2016

  • Australia HIA new home sales down by 5.3% vs. 0.6% uptick in January
  • New Zealand ANZ business confidence down to 3.2 vs. 7.1 previous
  • Australia’s private sector credit up by 0.6% vs. 0.5% expected and previous
  • Japan’s housing starts up by 7.8% vs. 2.2% decline expected, 0.2% increase in January

Month-end flows and a bit of catching up dominated the forex newswires during the Asian session, and boosted the dollar and the yen across the board.

Major Events:

End of fiscal year for Japan – The last day of the month marks the end of the fiscal year for The Land of the Rising Sun. Not surprisingly, a lot of Japanese who have foreign investments have chosen to take profits, which then boosted the local currency against most of its counterparts. Of course, it also didn’t hurt that a housing starts report from Japan clocked in a 7.8% gain when market players were only expecting a 2.2% uptick in February.

Catching up on ADP news – With not a lot of major data on the docket, some Asian session traders focused on the positive ADP report from the U.S. If you recall, the data printed above expectations and painted a pretty picture for this week’s NFP numbers.

The bulls even shrugged off a bit of dovishness after Chicago Fed President Evans supported Yellen’s cautious stance on raising rates, saying that “global growth and risks are an important consideration for policy.”

Weak reports from Australia and New Zealand – Aside from the overall dollar strength, the comdoll bears also had weak data from Australia and New Zealand to price in. New home sales from the Land Down Under fell by 5.3% after rising by 0.6% in January, while business confidence in New Zealand dropped from 7.1 to 3.2. Not a good sign considering that much of the Reserve Bank of New Zealand (RBNZ’s) concerns involve business sentiment!

Major Currency Movers:

USD – The Greenback gained a couple more pips across the board on a bit of extension from yesterday’s price action.

EUR/USD fell by 18 pips (-0.17%), GBP/USD slipped by 34 pips (-0.24%), and USD/CHF popped up by 11 pips (+0.11%).

JPY – The low-yielding yen was boosted by end-of-fiscal-year repatriation and a bit of risk aversion.

USD/JPY lost 22 pips (-0.20%), EUR/JPY fell by 45 pips (-0.35%), and GBP/JPY dropped by a whopping 71 pips (-0.44%).

Comdolls – The bears pounced on the comdolls on the back of overall strength of the lower-yielding currencies and some weak data from the commodity-related economies.

AUD/USD inched 11 pips lower (-0.14%) while USD/CAD popped up by 31 pips (+0.24%) and NZD/USD slipped by 34 pips (-0.49%).

Watch Out For:

  • 6:00 am GMT: German retail sales (0.3% expected vs. 0.7% previous)
  • 6:45 am GMT: French consumer spending and preliminary CPI reading
  • 7:00 am GMT: Spanish flash CPI
  • 7:00 am GMT: BOE Governor Carney to give a speech in Tokyo. Watch out for any hawkish or dovish remarks!
  • 8:30 am GMT: U.K. current account (-21.1B GBP expected vs. -17.5B GBP previous)
  • 8:30 am GMT: U.K. final GDP to remain at 0.5%?
  • 8:30 am GMT: U.K. net individual lending expected to print at 5.1B GBP vs. 5.2B last month
  • 8:30 am GMT: U.K. mortgage approvals to dip from 75K to 74K?
  • 8:30 am GMT: U.K. revised business investment to improve from -2.1% to -2.0%?
  • 9:00 am GMT: Euro Zone flash CPI estimate (-0.1% expected vs. -0.2% previous)
  • 9:00 am GMT: Euro Zone core CPI flash estimate (0.9% expected vs. 0.8% uptick last month)

See more:

U.S. Session Forex Recap

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