Asian Session Forex Recap – Apr. 25, 2016

  • Australia and New Zealand markets out on Anzac day holiday
  • Japan’s services producer price index up by 0.2% as expected in March

Australia and New Zealand are on banking holidays today, but that didn’t stop Asian session forex traders from getting pips across the board.

Major Events:

Low liquidity trading – With Australia and New Zealand on Anzac day holiday, trading volume was understandably lower. Still, the major currencies managed to make some notable moves throughout the session.

All eyes on the BOJ and the Fed – Risk aversion was the name of the game during the Asian session, as market players anticipate the BOJ, FOMC, and RBNZ policy decisions this week. The BOJ, in particular, is widely expected to introduce more stimulus especially since the latest set of economic reports are showing that the yen’s recent strength and Japan’s earthquakes have been affecting economic growth.

Lower oil prices – Whether it’s dollar strength or profit-taking from the previous weeks of strength or positioning ahead of this week’s central bank events, oil traders have mostly shrugged off bullish oil reports to push the Black Crack lower. Brent oil is down by 0.75% to $44.73 while U.S. crude is down by 0.80% to $43.38.

Major Currency Movers:

JPY – The yen gapped lower across the board before gaining against its counterparts. Aside from the overall risk aversion, another possible reason for the yen’s strength is Abe announcing that the government would allot extra budget for post-earthquake rebuilding projects.

USD/JPY gapped up from 111.62 to 111.87 before settling down to 111.09 while EUR/JPY popped up from 125.27 to 125.51 before slipping to 124.88. GBP/JPY was more notable with its gap from 160.87 to 161.82 before going back to 160.28.

GBP – The pound gapped higher at the start of the week before settling a bit lower against its counterparts. One possible explanation for the gap is Obama’s support against a Brexit.

GBP/USD gapped from 1.4413 to 1.4463 before going back down to 1.4427 while EUR/GBP dipped from .7787 to 7756 before shooting back up to .7792.

Watch Out For:

  • Italy on Liberation Day holiday
  • 8:00 am GMT: German Ifo business climate (107.1 expected vs. 106.7 previous)
  • 1:00 pm GMT: Belgian NBB business climate (-4.0 expected vs. -4.2 previous)

See more:

U.S. Session Forex Recap

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