Asian Session Forex Recap – August 29, 2016

  • AU HIA new home sales drops by 9.7% in July

Thanks to a lack of major economic releases, forex price action turned out to be as exciting as watching water boil. So, what moved the major currencies during the Asian session?

Major Events:

Australia’s home sales data – The Land Down Under printed a housing-related report, which reflected a 9.7% drop in new home sales for the month of July. This follows an 8.2% gain seen in the previous month and marks the lowest sales recorded since July 2014.

The Aussie barely reacted to the news though, probably because the report represents a correction from June’s strong figures. Other analysts also point out that the slowdown is expected as the housing construction begins its down cycle after seeing growth that’s faster than the 1994 peak.

Jawboning from Kuroda – The low-yielding yen took hits across the board on the first day following the Jackson hole weekend. See, Bank of Japan (BOJ) Chief Kuroda took his time on stage to hint that the central bank can still push the pedal to the metal by adding more stimulus. More specifically, he said that there’s “ample space for additional easing in each of the three dimensions,” referring to the trio of negative interest rates, asset-buying, and monetary base guidance.

Kuroda’s jawboning seems to have worked…for now. The Fed members’ hawkish remarks and Kuroda’s dovish ones contributed to a bullish pressure on USD/JPY and other yen crosses.

Slippery oil – The Black Crack slipped (pun intended) down the charts following the hawkish remarks from Fed members over the Jackson Hole weekend. See, oil is generally priced in dollars and signs of a future rate hike (or two) tend to push the Greenback higher, making oil products more expensive for traders who hold a different currency.

Profit taking sent Brent crude oil 1.24% down to $49.53 while U.S. oil is also down by 1.39% to $46.98.

Major Market Movers:

JPY –Kuroda’s jawboning worked to drag yen crosses across the board. USD/JPY shot up by another 19 pips (+0.19%) to 102.16, EUR/JPY is up by 36 pips (+0.32%) to 114.42, and GBP/JPY is up by 24 pips (+0.18%) to 134.09.

USD – The Greenback took a breather from Friday’s gains to lose a few pips against its higher-yielding counterparts.

EUR/USD is up by 19 pips (+0.17%) to 1.1201, USD/CHF slipped by 14 pips (-0.14%) to .9773, and USD/CAD is up by 20 pips (+0.15%) to 1.3002.

AUD – Lower commodity prices and a weak housing report from Australia dragged the Aussie early in the session, but the comdoll soon recovered as lower-yielding currencies weakened later in the second half of the session.

AUD/USD fell to a low of .7525 before recovering to .7548 (-0.20%) and AUD/JPY is back to its open 77.12 price after falling to a session low of 76.71.

Watch Out For:

  • U.K. markets out on Summer Bank holiday
  • No major reports on tap, but keep an eye out for possible market-movers!

See more:

Check out Last Week’s Top Movers!

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