Asian Session Forex Recap – Apr. 13, 2016

  • Japan’s PPI down by 3.8% vs. 3.5% decline expected, 3.4% decrease in Feb
  • China’s trade surplus down from 210B CNY to 195B CNY with a huge jump in exports
  • Australia’s Westpac consumer sentiment down by 4.0% in April vs. 2.2% decline in March

Risk on, baby! Thanks to a strong trade balance data from China, the high-yielding currencies had a field day (or session) against their lower-yielding counterparts.

Major Events:

China’s trade data – The biggest story of the hour is the release of China’s trade balance report. Exports from the world’s second largest economy showed growth for the first time in nine months, clocking in an 11.5% growth from a year earlier. Imports also declined less than expected with a 7.6% decrease following February’s 13.8% drop.

Overall the trade surplus narrowed down from 210B CNY ($32.6B) to 195B CNY ($29.9B) in March. Analysts caution that the numbers may have been boosted by post-Lunar New Year activity, but it seems that they fell on deaf ears as traders still bought Chinese economy-related bets like the Aussie, Kiwi, and gold throughout the session.

More yen weakness – Whether it’s due to profit-taking or jawboning from Japan’s officials, the yen extended its weakness for another session. Not surprisingly, this was good news to Japan’s exporters and Nikkei in general. The upbeat vibe and the slight upticks in commodity prices seeped into other high-yielding currencies and contributed to the overall risk-friendly trading environment.

Major Currency Movers:

JPY – The risk-friendly trading environment dragged the low-yielding yen lower across the board.

USD/JPY shot up by another 44 pips (+0.41%), GBP/JPY popped up by 54 pips (+0.35%), and EUR/JPY inched up by 22 pips (+0.18%).

AUD and NZD – Any good trade-related news from China is good news for its trading partners. Australia’s Aussie and New Zealand’s Kiwi gained pips against their counterparts.

AUD/USD gained 14 pips (+0.18%) and AUD/JPY shot up by 48 pips (+0.58%) while NZD/USD rose by 23 pips (+0.33%) and NZD/JPY closed 56 pips higher (+0.75%) than its session open price.

Watch Out For:

  • 6:45 am GMT: France’s final CPI expected to remain at 0.7%
  • 8:30 am GMT: BOE’s credit conditions survey
  • 9:00 am GMT: Euro Zone’s industrial production (-0.6% expected vs. 2.1% previous)

See more:

U.S. Session Forex Recap

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