Asian Session Forex Recap – August 31, 2016

  • Japan’s preliminary industrial production clocks in at 0.0% vs. 0.7% expected, 2.3% previous
  • NZ’s ANZ business confidence down from 16.0 to 15.5 in August
  • AU private sector credit up by 0.4% as expected vs. 0.2% previous
  • Japan’s housing starts jumps by 8.9% in July vs. 7.6% expected, -2.5% previous

The last trading day of the month turned out to be a mixed bag of beans for Asian session traders, as the major currencies moved in different directions.

Major Events:

Japan’s data releases – Japan fired up Asian session trading by printing its preliminary industrial production figures. It showed that production is unchanged in July when analysts had been expecting a 0.7% uptick after a 2.3% growth in June. On an annual basis, industrial actually dropped by 3.8% for the month.

Japan’s housing starts painted a slightly better picture, recovering by 8.9% in July after slipping by 2.5% in June. A closer look, however, reveals that construction orders received by 50 of the biggest contractors had declined by 10.9% compared to July last year.

Overall the reports supported the need for more monetary stimulus, which is probably why the yen was pushed lower across the board.

Fed rate hike expectations – Expectations of a Fed rate hike dragged Asian bourses lower save for Nikkei, which rejoiced at a stronger dollar.

As of writing, Australia’s ASX is down by 0.72%, the Shanghai index has recovered by 0.25%, Hang Seng is down by 0.23%, and Nikkei is up by 0.97%.

Major Market Movers:

JPY – Weak Japanese data and prospects of a Fed rate hike dragged the low-yielding yen lower across the board.

USD/JPY shot up to a high of 103.25 before settling back to its 103.03 open price, while EUR/JPY is up by 13 pips (+0.11%) to 114.92 and GBP/JPY is up by 26 pips (+0.19%) to 135.00.

USD – Whether it’s end-of-month profit-taking or simple jitters ahead of the NFP report this Friday, the dollar ended up giving some of its gains against its major counterparts.

EUR/USD is up by 15 pips (+0.14%) to 1.1157, GBP/USD is up by 25 pips (+0.19%) to 1.3104, and AUD/USD is up by 14 pips (+0.19%) to .7522.

Watch Out For:

  • 6:00 am GMT: Switzerland UBS consumption indicator
  • 6:00 am GMT: German retail sales (0.5% expected, -0.1% previous)
  • 6:00 am GMT: U.K. Nationwide house price index (-0.1% expected, 0.5% previous)
  • 6:45 am GMT: French consumer spending (0.3% expected, -0.8% previous)
  • 6:45 am GMT: French preliminary CPI (0.4% expected, -0.4% previous)
  • 7:55 am GMT: German unemployment change (-2K expected, -7K previous)
  • 8:00 am GMT: Italian unemployment rate (11.5% expected, 11.6% previous)
  • 9:00 am GMT: Euro Zone CPI flash estimate (0.3% expected, 0.2% previous)
  • 9:00 am GMT: Euro Zone core CPI expected to remain at 0.9%
  • 9:00 am GMT: Euro Zone unemployment rate (10.0% expected, 10.1% previous)/li>

See more:

U.S. Session Recap

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