Asian Session Forex Recap – Sept. 27, 2016

  • BOJ releases its meeting minutes
  • Japan’s services producer price index (y/y) up by 0.2% vs. 0.3% expected, 0.3% previous
  • First presidential debate boosts USD

With not a lot of data on the docket, forex traders turned their focus on the first U.S. presidential debate. Read on to see how the markets reacted!

Major Events:

BOJ’s meeting minutes – The Bank of Japan (BOJ) hit the news wires early in the Asian session with its monetary policy meeting minutes from its late July meetings. The document revealed nothing new aside from notes that members agreed that inflation expectations had weakened recently.

Many of them are also in favor of expanding ETF purchases, as global risk uncertainties might affect business and consumer sentiment. The release barely had any impact on the yen, likely because yen traders have already priced in the central bank’s changes. Read Forex Gump’s major takeaways if you missed the event!

First presidential debate – The biggest story of the hour was the first presidential debate between candidates Donald Trump and Hillary Clinton. As Forex Gump said in his piece, the event was closely-watched because the world’s largest economy is on the cusp of determining its next commander-in-chief.

The winner of the debate is… the Mexican Peso. While American voters are still trying to digest the candidates’ messages, forex traders have spoken by selling USD/MXN like the wall is getting built tomorrow and the U.S. is paying for it. The pair is down by a whopping 367 pips (-1.85%) to 19.5102 at the end of the session on headlines that Hillz has nailed the first round. Olé!

Risk-taking investors also picked up on the pro-Hillary vibe. Apparently, they’ve associated a Hillary win to status quo, while a Trump win represents market uncertainty. Nikkei is up by 0.73%, Hang Seng is up by 1.09%, and the Shanghai index is up by 0.07%. Australia’s ASX is down by 0.50% though.

Slip in oil prices – Debate headlines slipped (pun intended) right past oil traders today, as they focused on the headlines related to this week’s OPEC meetings in Algeria.

Word around the hood is that Iran isn’t tempted to call Saudi’s new stakes even though the world’s largest oil producer has offered to cap its output to January’s levels and even commit to cutting its production by 500,000 barrels per day. The diminishing possibility of cooperation between the oil giants weighed on Black Crack, pushing Brent crude oil 0.31% lower to $47.47 while U.S. crude oil prices also dropped by 0.17% to $45.85.

Major Market Movers:

USD – The dollar’s price action was mixed, as relief over the debates both encouraged dollar-buying and risk-taking.

EUR/USD is down by 11 pips (-0.10%) to 1.1244, USD/CHF inched 7 pips higher (+0.07%) to .9697, and USD/JPY is up by 53 pips (+0.53%) to 100.79. Meanwhile, GBP/USD is up by 11 pips (+0.09%) to 1.2983.

Comdolls – Commodity-related currencies like the Aussie, Loonie, and Kiwi got a boost from overall risk taking even though oil prices took a hit during the session.

AUD/USD is up by 27 pips (+0.35%) to .7664, USD/CAD is down by 68 pips (-0.51%) to 1.3169, and NZD/USD is up by 18 pips (+0.25%) to .7291.

Watch Out For:

  • 6:00 am GMT: German import prices (-0.1% expected, 0.1% previous)
  • 10:00 am GMT: U.K. CBI realized sales (8 expected, 9 previous)

See also:

U.S. Session Recap
London Session Recap

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