Asian Session Forex Recap – August 17, 2016

  • NZ employment change (q/q) up by 2.4% vs. 0.6% expected, 1.4% previous
  • NZ PPI input (q/q) up by 0.9% vs. 0.5% expected, -1.0% previous
  • NZ PPI output (q/q) rises by 0.2% as expected vs. -0.2% in Q1 2016
  • NZ unemployment rate down from 5.2% to 5.1% vs. 5.3% expected
  • AU MI leading index grows by 0.1% vs. -0.2% previous
  • AU wage price index (q/q) keeps its 0.5% growth in Q2 2016

The dollar gained more ground against its counterparts, as Asian session forex traders gear up for the upcoming FOMC meeting minutes.

Major Events:

NZ employment numbers – New Zealand’s headline unemployment rate came in at 5.1% in Q2 2016, better than the revised 5.2% rate in the previous quarter. Kiwi bears were careful not to read too much into the report though, since Statistics New Zealand also announced that it had used revised surveys and that today’s numbers are NOT comparable to the previous releases.

In its statement, Statistics New Zealand said that it redeveloped its Household Labor Force Survey (HLFS) to identify better with self-employed workers and those in the armed forces. At the same time, the revised surveys would also fit international standards better. In any case, the changes in the office’s methods led forex traders to take today’s numbers with a grain of salt.

Jawboning from the MOF – With the yen clobbering its higher-yielding counterparts earlier this week, it’s no surprise that we see a bit of jawboning from Japanese officials. It was Vice Finance Minister for International Affairs Masatsugu Asakawa’s turn today, as he reiterated that they’re watching the yen’s movements closely. Specifically, he stated that “if there are excessively sharp movements, we will have to take action.

Whether or not market players believed the MoF official (the Ministry of Finance is the one that gives the BOJ thumbs up before any currency intervention), the yen managed to lose pips across the board.

All eyes on the FOMC meeting minutes – The Greenback continued to log in gains against its major counterparts ahead of the FOMC meeting minutes. It also didn’t hurt that Fed members Dudley and Lockhart gave hawkish speeches yesterday, and supported speculations that the Fed would raise its rates at least once this year.

Major Market Movers:

USD – The dollar was the biggest winner among the majors, as rate hike speculations pushed the currency higher.

USD/JPY shot up by 33 pips (+0.33%) to 100.61, EUR/USD slipped by 7 pips (-0.06%) to 1.1273, and GBP/USD inched 6 pips lower (-0.05%) to 1.3034. Even the comdolls took hits with AUD/USD falling by 16 pips (-0.21%) to .7679 and USD/CAD shooting up by 16 pips (+0.12%) to 1.2868.

JPY – Whether it’s due to profit-taking or jawboning from a MoF official, the yen lost pips across the board.

EUR/JPY jumped by 33 pips (+0.29%) to 113.42, GBP/JPY rose by 39 pips (+0.30%) to 131.14, and AUD/JPY popped up by 17 pips (+0.22%) to 78.18.

NZD – Kiwi shot higher on the back of better-than-expected unemployment reports from New Zealand, but soon gave up its gains when traders realized that much of the data’s improvements can be attributed to Statistics New Zealand’s way of gathering data.

NZD/USD hit a high of .7323 before ending the session at .7267 (-0.04%), NZD/JPY reached 73.44 before closing at 73.13 (+0.34%), and AUD/NZD slipped to 1.0516 before closing at 1.0566 (-0.18%).

Watch Out For:

  • 8:30 am GMT: U.K. employment releases (average earnings, jobless claims, unemployment rate). Check out Forex Gump’s trading guide here!
  • 9:00 am GMT: Swiss ZEW economic expectations

See more:

U.S. Session Recap

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