Asian Session Forex Recap – June 30, 2016

  • New Zealand’s building consents down by 0.9% vs. 6.8% increase in April
  • U.K. GfK consumer confidence at -1 vs. -2 expected, -1 previous
  • Japan’s preliminary industrial production down by 2.3% vs. 0.1% decline expected, 0.5% uptick previous
  • New Zealand’s ANZ business confidence up from 11.3 to 20.2 in June
  • Australia’s private sector credit up by 0.4% vs. 0.5% expected and previous

The dollar strikes back! Brexit-related jitters trickled back to the markets after a round of profit-taking and risk-taking from the previous forex trading sessions.

Major Events:

Brexit jitters – The high-yielding currencies took a step back from their gains from the previous sessions as Brexit-related jitters trickled back into the markets. More specifically, traders are closely watching the Conservative Party’s deadline of submitting potential leadership options. If you remember, Cameron’s resignation left a leadership vacuum for one of Britain’s top political parties.

Mixed data from Australia and New Zealand – Mixed economic reports from Australia and New Zealand failed to support the Aussie and the Kiwi today. Building consents in New Zealand fell by 0.9% in May after rising by 6.8% in April while business confidence shot up from 11.3 to 20.2 in June. Meanwhile, the Land Down Under showed a 0.4% increase on private sector credit, a bit lower than the 0.5% uptick that markets had expected.

Japan’s industrial production – Just as Nikkei was set to follow the U.S. equities’ footsteps, Japan’s industrial production knocked the confidence out of some Japanese traders.

The report reflected a 2.3% decline in May when analysts had only been pricing in a 0.1% slip. Output dropped in 11 of the 15 sectors, with chemicals, machinery, and electronic parts and devices weighing on the overall data. Japan’s earthquakes in April and the yen’s recent strength might have also factored in the weakness. This is bad news for Japan, which had just released a weaker-than-expected retail sales report.

Major Market Movers:

JPY – The low-yielding yen took advantage of the overall slip in risk appetite.

USD/JPY might have only slipped by 9 pips (-0.09%) but EUR/JPY saw a 12-pip decline (-0.11%), GBP/JPY fell by 51 pips (-0.37%), and AUD/JPY dropped by 7 pips (0.09%).

Comdolls – Commodity-related currencies got knocked lower by the overall risk aversion.

AUD/USD is trading at .7420 after hitting a session high at .7474, USD/CAD shot back up from 1.2929 to 1.2966, and NZD/USD fell from its .7126 high to trade at .7080.

Watch Out For:

  • Italy on a bank holiday
  • 7:00 am GMT: German retail sales (0.7% expected vs. -0.9% previous)
  • 7:45 am GMT: French consumer spending expected to remain at -0.1%
  • 8:00 am GMT: KOF economic barometer (102.7 expected vs. 102.9 previous)
  • 8:55 am GMT: German unemployment change (-5K expected vs. -11K previous)
  • 9:30 am GMT: U.K. current account (-27.3B GBP expected vs. -32.7B GBP previous)
  • 9:30 am GMT: U.K. final GDP expected to remain at 0.4%
  • 9:30 am GMT: U.K. index of services (0.4% expected vs. 0.6% previous)
  • 10:00 am GMT: Euro Zone CPI flash estimate (0.0% expected vs. -0.1% previous)
  • 10:00 am GMT: Euro Zone core CPI flash estimate expected to remain at 0.8%

See more:

U.S. Session Forex Recap

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