Asian Session Forex Recap – Oct. 10, 2016

  • China Caixin services PMI slips from 52.1 to 52.0 in September
  • Japanese markets out on Health-Sports Day holiday
  • U.S. Presidential debate weighs on the Mexican Peso
  • PBOC boosts USD/CNY reference rate to its highest since September 2010

Forex trading was a mixed bag of nuts during the Asian session, as a lack of economic catalysts sent the major currencies all over the charts.

Major Events:

U.S. Presidential debate – Presidential candidates Hillary Clinton and Donald Trump faced off at Washington University in St. Louis for the second round of their debates leading up to the elections next month. The candidates were asked about issues such as the economy, fighting against ISIS, and the U.S. medical system though there was no lack of personal attacks on both camps.

In the end, currency traders saw Trump’s improved performance and they reacted by selling the Mexican Peso (MXN). If you’ve just tuned in, you should know that a Trump win represents less favorable trade relationship between the U.S. and Mexico.

PBoC weakened the yuan – The People’s Bank of China (PBoC) weakened the yuan reference rate from 6.6778 to 6.7008, which marks USD/CNY’s highest level since September 2010. Not surprisingly, the move gave Chinese stocks a boost a day after China’s markets went on a week-long holiday for its Golden Week celebrations.

Major Market Movers:

MXN – USD/MXN gapped lower over the weekend and opened at 18.991, but hit a high of 19.0579 during the debates before settling just above the 19.0000 mark.

USD – The Greenback’s price action was a mixed bag of nuts, as it lost pips on the yen and franc but gained a couple on the euro and the comdolls.

USD/JPY is down by 43 pips (-0.42%) to 102.86 and EUR/USD is up by 6 pips (+0.05%) to 1.1193 while AUD/USD is down by 13 pips (-0.17%) to .7596 and NZD/USD is down by 6 pips (-0.08%) to .7154.

Watch Out For:

  • 5:45 am GMT: Swiss unemployment rate expected to remain at 3.4%
  • 6:00 am GMT: German trade balance (19.3B EUR expected, 19.4B EUR previous)
  • 8:00 am GMT: Italian industrial production (-0.2% expected, 0.4% previous)
  • 8:30 am GMT: Sentix investor confidence (6.2 expected, 5.6 previous)

See also:

Last Week’s Top Forex Movers

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In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

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