Asian Session Forex Recap – July 8, 2016

  • Japan’s current account balance down from 1.63T JPY to 1.41T JPY vs. 1.52T JPY expected
  • Japan’s average cash earnings down by 0.2% vs. 0.5% uptick expected, 0.0% previous
  • Japan’s economy watchers’ sentiment down from 43.0 to 41.2 vs. 42.9 expected

It was a topsy-turvy session for forex traders, as risk appetite got mixed in with a bit of dollar strength ahead of the NFP report.

Japan’s data dump – Data from the Land of the Rising Sun saw the current account surplus narrowing down in May. Not only that, but average wages also slipped by 0.2% when analysts had expected a flat growth following the previous month’s 0.5%.

Last but not the least, the economy watchers sentiment report also clocked in lower-than-expected figures. Definitely not good news for the BOJ, which is already facing an uphill battle to prop up inflation.

PBoC intervention rumors – One of the bigger stories of the hour is the possibility of the People’s Bank of China (PBoC) intervening in the currency markets. An earlier report reflected China’s foreign-exchange reserves unexpectedly increasing in June while another showed a lack of aggressive capital outflows in the same month.

Both suggested that the PBoC now has more room to gradually depreciate its local currency. There was no intervention though, which is probably why the Chinese equities markets eventually turned lower.

All eyes on the NFP report – The Greenback lost a couple of pips against its counterparts ahead of the NFP report due in the U.S. session. As I mentioned in my U.S. session recap, the better-than-expected jobs data from yesterday may have supported speculations of a strong NFP reading today. Could it be that the optimists had decided to stay in the sidelines after all? Read Forex Gump’s trading guide if you’re planning on trading the release!

Major Market Movers:

USD – The dollar lost pips across the board after gaining ground in the U.S. session. One possible explanation is profit-taking ahead of the actual NFP release.

EUR/USD shot up by 21 pips (+0.19%), GBP/USD is up by 40 pips (+0.31%), and USD/CHF is down by 13 pips (-0.13%).

JPY – The yen was once again the star of the show after Japan’s weak reports and a relatively tame jawboning by an official decreased the possibility of an intervention from the BOJ.

USD/JPY is flirting with the 100.50 mark, EUR/JPY is about to hit its weekly lows, and GBP/JPY is back to the 130.00 level after hitting a session high of 130.83.

Watch Out For:

  • 6:45 am GMT: Swiss unemployment rate expected to remain at 3.5%
  • 7:00 am GMT: German trade surplus (22.3B EUR expected vs. 24.0B EUR previous)
  • 7:45 am GMT: French government budget balance
  • 7:45 am GMT: French industrial production (-0.4% expected vs. 1.2% previous)
  • 9:30 am GMT: U.K. goods trade balance (-10.2B GBP expected vs. -10.5B GBP previous)

See more:

U.S. Session Forex Recap

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