Asian Session Forex Recap – Sept. 19, 2016

  • NZ Westpac consumer sentiment up from 106.0 to 108.0 in Q3 2016
  • U.K. Rightmove house price index up by 0.7% vs. 1.2% decline previous
  • Japanese markets out on Respect-for-the-Aged Day Holiday

The Greenback was the biggest loser today, as risk-taking got mixed in with forex traders taking off their dollar positions ahead of the FOMC meeting.

Major Events:

First day for the new RBA Governor – Say hello to Philip Lowe! It’s the first day for the new Reserve Bank of Australia (RBA) Governor today and boy; he sure didn’t waste any time!

In a statement, Treasurer Scott Morrison relayed that he and Glenn Stevens’ successor have agreed that “now is not the time to be making any monetary policy setting experiments.” They’re also sticking to the RBA’s 2% – 3% inflation target, saying that “getting inflation back into that target is a worthy goal.” Good news for market players who are allergic to big changes!

Rise in commodity prices – Oil prices received boosts on rumors that OPEC may pencil in an unscheduled meeting if the meeting in Algeria later this month produces an output freeze agreement. Though many traders have long discounted the meeting as a replay of the one that occurred earlier this year, the prospect of an output freeze was still enough to whet the oil bulls’ appetite. Gold also received a boost, likely due to the overall dollar weakness in the markets.

Brent crude oil is up by 1.73% to $46.56 while U.S. oil prices is also up by 1.81% to $44.41. Meanwhile, gold inched 0.72% higher to $1,319.65.

Overall dollar weakness – The low-yielding dollar was smacked down across the board today. Rising commodity prices may have played a role, but this week’s FOMC statement is more likely the culprit. Bets on whether or not the Fed would raise its rates remain tight, which tends to scare off tons of dollar-trading players who aren’t into high-stakes trading.

Major Market Movers:

USD – The Greenback started the week on a red note, as traders took off their dollar positions ahead of this week’s major events.

EUR/USD is up by 14 pips (+0.13%) to 1.1167, GBP/USD recovered by 34 pips (+0.26%) to 1.3039, and USD/JPY lost 10 pips (-0.10%) to 102.05 despite its tight trading conditions.

Comdolls – Higher oil prices, a stable new leadership for the RBA, and weak dollar sentiment all ganged up to push commodity-related currencies against the Greenback.

AUD/USD is up by 53 pips (+0.71%) to .7535, USD/CAD is down by 61 pips (-0.46%) to 1.3161, and NZD/USD is up by 43 pips (+0.59%) to .7303.

Watch Out For:

  • 8:00 am GMT: Euro Zone current account (27.2B EUR expected, 28.2B previous)
  • German Bundesbank monthly report. No schedule yet, but keep close tabs on a release today!

See also:

Last Week’s Top Forex Movers

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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