Asian Session Forex Recap – Oct. 11, 2016

  • Japan’s current account up from 1.45T JPY to 1.98T JPY in August
  • AU NAB business confidence remains at 6 in September
  • AU home loans down by 3.0% vs. 1.3% decline expected, 4.5% dip in July

A pretty eventful session for the major currencies, as forex traders priced in a couple of potential catalysts for the next trading sessions. Here’s what’s up!

Major Events:

Australia’s data releases – Home lending in the Land Down Under weakened for a second consecutive month in August. Details reveal that both the number of loans written as well as the value of those loans decreased for the month.

Home loans fell by a seasonally adjusted 3.0% in August when analysts had only been expecting a 1.3% dip. Meanwhile the NAB business confidence report remained at an index reading of 6 in September, which is mostly in line with its long-term average.

RBNZ jawboning – John McDermott spooked the Kiwi bulls earlier today when he hinted at another rate cut. In a speech, the Reserve Bank of New Zealand (RBNZ) Assistant Governor said that the next quarterly inflation report is “expected to be low,” adding that “our current projections and assumptions indicate that further policy easing will be required…” Duhn duhn duhn…

More Brexit-related jitters – Though there was no flash crash during today’s Asian session, the pound still attracted a lot of forex bears. See, a report by The Times cited “leaked government papers” when it detailed that the U.K. could lose up to 66B GBP a year in tax revenues under a hard Brexit. This is expected to drag Britain’s GDP by as much as 9.5%, which would force ministers to either cut public spending or raise its taxes.

Major Market Movers:

USD – Overall risk aversion and a bit of profit-taking from yesterday’s rally in oil prices further boosted the Greenback across the board.

USD/JPY is up by another 20 pips (+0.19%) to 103.86, EUR/USD slipped by 5 pips (-0.05%) to 1.1131, and AUD/USD fell by a whopping 58 pips (-0.76%) to .7548.

GBP – The pound lost more pips thanks to the “leaked” article by The Times.

GBP/USD is down by 39 pips (-0.32%) to 1.2324, GBP/JPY is down by 16 pips (-0.13%) to 127.99, and EUR/GBP is up by 27 pips (+0.30%) to .9034.

NZD – Forex bears pounced on McDermott’s jawboning, as they pushed the comdoll sharply lower across the board.

NZD/USD is down by 70 pips (-0.98%) to .7067, NZD/JPY is down by 58 pips (-0.78%) to 73.40, and EUR/NZD is up by a whopping 147 pips (+0.94%) to 1.5752.

Watch Out For:

  • 5:00 am GMT: Japan’s Economy Watchers’ Sentiment (45.9 expected, 45.6 previous)
  • 9:00 am GMT: German ZEW economic sentiment (4.2 expected, 0.5 previous)
  • 9:00 am GMT: Euro Zone ZEW economic sentiment (6.3 expected, 5.4 previous)

See also:

U.S. Session Recap
London Session Recap

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