Asian Session Forex Recap – August 22, 2016

  • Kuroda’s jawboning weakens the yen
  • All eyes on this week’s Jackson Hole meeting

With no major economic report on tap, forex traders focused on central bank remarks and geared up for a potentially eventful week ahead.

Major Events:

Weekend gaps for the yen – With no major reports released, Haruhiko Kuroda’s remarks made its way to early Asian session trading. See, over the weekend the BOJ Governor compared the BOJ’s rates to that of the ECB’s and stated that “the BOJ will not rule out deepening cut to negative rates it introduced in February.”

He also mentioned that adjusting its asset-purchasing program is also on the table depending on the outcome of a comprehensive assessment out in September. The yen ended up opening the week with downside gaps though they were eventually closed hours after the session started. Guess traders didn’t like it that Japan’s Prime Minister is busy playing Super Mario instead of executing his stimulus program?

Lower commodity prices – Commodity prices took a step back today, as higher demand for the Greenback pushed gold prices lower while a U.S. oil rigs count report last Friday inspired a bit of profit-taking from oil’s recent gains. Of course, it didn’t help that over the weekend Iran, OPEC’s second largest oil producer, stated that it would boost its oil exports in the next few days. Talk about not being a team player!

Major Market Movers:

JPY – The yen gapped lower against its higher-yielding counterparts on the back of Kuroda’s weekend jawboning. The gaps have closed since then, but it looks like the yen’s downside momentum took hold.

USD/JPY is up by 56 pips (+0.56%) to 100.85 from its session low of 100.29 while EUR/JPY is steady above the 113.50 mark after hitting a session high of 114.23. Meanwhile, GBP/JPY is steady at 131.52 after gapping higher by 51 pips (+0.39%).

USD – Expectations of a hawkish Yellen during the Jackson Hole meeting this week led to higher demand for the Greenback.

EUR/USD is down by 30 pips (-0.27%) to 1.1278 and USD/CHF is up by 13 pips (+0.14%) to .9641.

Comdolls – Commodity-related currencies like the Aussie, Loonie, and Kiwi got one-two punched by a combo of strong dollar demand and weaker commodity prices.

AUD/USD is down by 41 pips (-0.54%) to .7586 from its .7627 session high, USD/CAD is up by 30 pips (+0.23%) to 1.2922, and NZD/USD is down by 34 pips (-0.47%) to .7217.

Watch Out For:

  • No major economic reports on tap. Keep an eye out for other potential market movers though!

See more:

Check out Last Week’s Top Movers!

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