Asian Session Forex Recap – August 4, 2016

  • Australia’s retail sales rises by 0.1% in June vs. 0.3% uptick expected, 0.2% previous

It was a topsy-turvy trading session for the major currencies, as risk appetite got capped by weaker-than-expected data and profit-taking ahead of today’s events.

Major Events:

Australia’s retail sales – Retail sales from the Land Down Under clocked in a 0.1% annualized growth in June, which is lower than May’s 0.4% uptick and the expected 0.3% increase. Not only that, but the numbers also put retail trade growth in the year to June at 2.8%, the slowest annual pace of growth since mid-2013.

A closer look tells us that clothing, department stores, and electronic sectors contributed the most, as the winter season pushed consumers to stock up on warmer clothing. Meanwhile, hardware and pharmaceuticals, and cosmetics saw the most declines.

Comments from Japanese officials – The yen started the session on a strong note, as a knife attack in London inspired a bit of risk aversion. It also helped that Bank of Japan (BOJ) Deputy Governor Kikuo Iwata said that the BOJ would focus on monetary transmission mechanism and obstacles to its stimulus plan succeeding. Analysts took it as a sign that the BOJ is running out of bullets, which pushed the yen higher.

Luckily for the yen bears, newly-appointed Regional Economy Minister Kozo Yamamoto hit the newswires and said that the BOJ has policies that would push inflation to 1.5% by the middle of the next fiscal year. In addition, he also hinted that the government is working on a “wage target policy” after looking at prices for so long.

All eyes on the BOE’s Super Thursday – Forex price action was relatively subdued today, partly because the Bank of England (BOE) is having a Super Thursday today. More specifically, it’s about to release its interest rate and asset purchases decision as well as its inflation forecasts. What’s more, BOE Governor Mark Carney is also due to give a speech minutes after the central bank statement is released.

If you’ve read Forex Gump’s trading guide, then you know that a lot of market players are expecting more stimulus from the BOE today. After all, they’ve already had enough time to digest a couple of reports that covers the post-EU referendum period. Make sure you stick around for the releases!

Major Market Movers:

AUD – The Aussie was on its way higher in the charts before Australia’s weaker-than-expected retail sales report rained on the comdoll’s parade.

AUD/USD reached a high of .7627 before closing with only a 27-pip gain (+0.36%) to .7611. Meanwhile, AUD/JPY capped the session with a 26-pip gain (+0.34%) to 77.02 and EUR/AUD is down by 54 pips (-0.37%) to 1.4645.

JPY – The yen started the session strong before a bit of dovish remarks from government officials pushed the low-yielding currency lower.

USD/JPY ended the session right at its open price after hitting a low of 100.87. Ditto for EUR/JPY, which fell to 112.48 before ending the session at 112.79, just 2 pips lower than its open price.

Watch Out For:

  • 6:45 am GMT: Switzerland’s SECO consumer climate
  • 9:00 am GMT: ECB economic bulletin
  • 9:10 am GMT: Euro Zone retail PMI
  • 12:00 pm GMT: BOE’s Super Thursday (Inflation report + Interest rate decision + Asset purchases decision). Read Forex Gump’s trading guide if you’re trading the event!
  • 12:30 pm GMT: Mark Carney to give a speech in London

See more:

U.S. Session Recap

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