Asian Session Forex Recap – August 30, 2016

  • Australia’s building approvals rise by 11.3% in July vs. 0.0% growth expected

A pretty subdued trading session for forex traders, as a lack of catalysts kept major currencies in tight intraday ranges. Read on to see the market-movers for the past couple of hours.

Major Events:

Japan’s data dump – As listed in my U.S. session recap, Japan printed mostly better-than-expected data today. Household spending rose by 0.5% on an annualized rate in July, better than the 1.3% drop that analysts were expecting but still marks the fifth consecutive monthly decline for the report.

The unemployment rate also ticked lower from 3.1% to 3.0%, while the retail sales release showed more reluctance to spend with a 0.2% decline for the month after falling by 1.3% in June.

More jawboning from Japanese officials – A Reuters report cited that Koichi Hamada, adviser to Japanese PM Shinzo Abe, is calling for the Ministry of Finance (MoF) to intervene in the FX markets. Meanwhile Chief Cabinet Secretary Yoshihide Suga also got busy under the spotlight, saying that the government is watching the markets closely and is ready to respond appropriately.

The remarks come after Bank of Japan (BOJ) Governor Kuroda hit the newswires over the weekend and hinted that the central bank is ready and willing to load up the economy with more monetary stimulus. The jawboning seems to have worked for now, as yen crosses strengthened somewhat during the trading session.

Australia’s building approvals – Building approvals in the Land Down Under surged at its fastest rate in almost three years in July, following two months of modest declines. While the report bodes well for construction activity, it doesn’t help investor concerns that apartment gluts forming in the Land Down Under’s largest cities.

Major Market Movers:

USD – Dollar bulls got their mojo back today, as the low-yielding currency got back some of its losses from the previous session.

EUR/USD is down by 16 pips (-0.14%) to 1.1173, GBP/USD is down by 22 pips (-0.17%) to 1.3084, and USD/CHF is up by 21 pips (+0.22%) to .9805.

JPY – The low-yielding yen gained pips at the release of better-than-expected reports from Japan, but soon lost its ground on a bout of risk-taking in the Asian bourses.

USD/JPY hit a low of 101.76 before ending the session at 102.09 (+0.16%), EUR/JPY reached 113.86 before ending up at 114.07 (+0.05%), and AUD/JPY dropped to 77.09 before closing at 12 pips (+0.16%).

Watch Out For:

  • 6:00 am GMT: German import prices (-0.1% expected, 0.5% previous)
  • 7:00 am GMT: KOF economic barometer (102.2 expected, 102.7 previous)
  • 7:00 am GMT: Spanish flash CPI (-0.5% expected, -0.6% previous)
  • 8:00 am GMT: Italian retail sales (0.2% expected, 0.3% previous)
  • 8:30 am GMT: U.K. net individual lending (4.9B GBP expected, 5.2B GBP previous)
  • 8:30 am GMT: U.K. mortgage approvals (63K expected, 65K previous)

See more:

U.S. Session Recap

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