Asian Session Forex Recap – Nov. 18, 2016

  • NZ ANZ consumer confidence rises to 19-month high to 127.2 in November
  • Statistics NZ to resume printing official releases on Monday
  • PBoC devalues the yuan…again

With not a lot of data on the docket, Asian session traders merely extended themes from the U.S. session. Here’s how the major currencies traded!

Major Events:

Dollar domination continues – With not a lot of data on the docket, Asian session forex traders merely extended economic themes from the previous trading session.

As mentioned in my U.S. session recap, risk-takers and dollar bulls got re-invigorated by Janet Yellen hinting that a December rate hike is all but a done deal. As a result, the dollar found fresh support and managed to bust through technical resistance levels against its major counterparts.

Australia’s A SX 200 is up by 0.39%, Hang Seng is only 0.05% in the red, the Shanghai index is down by 0.28%, and Nikkei, which continued to enjoy the impact of the BOJ’s actions yesterday and risk appetite today, is up by 0.53%.

Risk-takers snubbed oil prices though, as it got one-two punched by profit-taking ahead of the official OPEC meeting and overall dollar strength. Recall that oil is priced in dollars, which makes the commodity expensive as the dollar gains strength.

Brent crude oil is down by 0.71% to $46.16 while U.S. crude oil prices fell by 1.03% to $44.95.

PBoC devalues yuan..again – Earlier today the People’s Bank of China (PBoC) set the USD/CNY mid-point higher from 6.8692 to 6.8796 to track the dollar’s gains elsewhere. This marks the 11th consecutive (and longest) time that the central bank has devalued its currency.

With the dollar relentlessly rocketing across the board for the past few days, some policymakers are understandably getting concerned. Japan’s Finance Minister Taro Aso crossed the wires today to say that they should watch currency moves “with a sense of urgency;” a South Korean official has described the Korean won’s decline as “a little excessive,” while word around the hood is that the PBoC is gearing up to slow the yuan’s decline.

Major Market Movers:

USD – The dollar has taken the crown again today as Asian session traders tracked yesterday’s market themes.

EUR/USD is down by another 23 pips (-0.22%) to 1.0603, USD/CHF is up by 16 pips (+0.16%) to 1.0087, and GBP/USD is down by 12 pips (-0.10%) to 1.2403.

JPY – The yen has been the biggest loser for the past couple of hours, as USD/JPY’s break above the 110.00 mark inspired rallies in other yen crosses.

USD/JPY shot up to a high of 110.78 before settling down to 110.56 (+0.59%). Meanwhile GBP/JPY gained 69 pips (+0.51%) to 137.12, EUR/JPY inched 44 pips higher (+0.38%) to 117.23, and AUD/JPY jumped by 30 pips (+0.37%) to 81.76.

CAD – The oil-related currency lost pips to its major counterparts after oil prices fell on both sides of the Atlantic.

USD/CAD rose by another 48 pips (+0.36%) to 1.3545 while EUR/CAD popped up by 20 pips (+0.14%) to 1.4363 and GBP/CAD clocked in another 45-pip gain (+0.27%) at 1.6801.

Watch Out For:

  • 8:00 am GMT: German PPI (0.3% expected, -0.2% previous)
  • 9:30 am GMT: ECB’s Draghi to give a speech in Frankfurt. Don’t even think of missing it!
  • 10:00 am GMT: Euro Zone current account (31.3B EUR expected, 29.7B EUR previous)
  • 10:10 am GMT: MPC member Ben Broadbent to give a speech in London

See also:

U.S. Session Recap
London Session Recap

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