Asian Session Forex Recap – Nov. 23, 2016

  • Japan on Labor Thanksgiving Day holiday
  • China’s MNI business sentiment up from 52.2 to 53.1 in November
  • AU construction work done (q/q) fell by 4.9% vs. 1.5% decline expected, 3.1% slip in Q2 2016

With our Japanese friends out on a market holiday, Asian session forex traders mostly extended economic themes from the previous sessions. Here’s what’s up!

Major Events:

Overall risk appetite – Since there weren’t a lot of economic reports scheduled during the Asian session, forex traders simply piggybacked from Wall Street’s consecutive gains. If you recall, market players have been buying U.S. assets like crazy since Trump won the elections.

It is believed that his infrastructure and tax cut plans can only be good for Uncle Sam, which is probably why the U.S. indices have been clocking in back-to-back-to-back record highs and U.S. Treasury yields have been dominating most of its counterparts.

Nikkei is out on a market holiday but Australia’s A SX 200 is up by 1.31%, Hang Seng also popped up by 0.19%, and the Shanghai index only saw a 0.05% slip throughout the day.

PBoC back to devaluing the yuan – After breaking its 12-day streak yesterday, the People’s Bank of China (PBoC) is back to devaluing the yuan against the Greenback. China’s central bank set its USD/CNY mid-point fix at 6.8904 today, higher than yesterday’s 6.8779 figure. The move will likely inspire speculations that China will soon intervene in the markets to prevent even more capital flight over the next couple of days.

AUD is king of pips – The Aussie was king of pips today even though Australia printed a weaker-than-expected quarterly construction report. One possible explanation is the continued increase in iron ore prices (it was up by 8% in China today) while the overall risk-friendly vibe didn’t hurt either.

Major Market Movers:

AUD – The Aussie enjoyed a one-two punch of higher iron ore prices and overall risk appetite.

AUD/USD is up by 23 pips (+0.31%) to .7420, EUR/AUD fell by 41 pips (-0.29%) to 1.4321, AUD/JPY shot up by 16 pips (+0.20%) to 82.40, and AUD/CAD popped up by 29 pips (+0.29%) to .9972.

NZD – The New Zealand dollar wasn’t far behind the Aussie, as overall risk appetite also boosted the high-yielding currency.

NZD/JPY hit a session high of 78.59 before settling back down to 78.45, EUR/NZD slipped by 13 pips (-0.09%) to 1.5044, and GBP/NZD inched 11 pips lower (-0.06%) to 1.7579.

Watch Out For:

  • 9:00 am GMT: French flash manufacturing PMI (54.8 expected, 55.0 previous)
  • 9:00 am GMT: French flash services PMI (52.1 expected, 51.4 previous)
  • 9:30 am GMT: German flash manufacturing PMI (54.8 expected, 55.0 previous)
  • 9:30 am GMT: German flash services PMI (54.1 expected, 54.2 previous)
  • 10:00 am GMT: Euro Zone flash manufacturing PMI (53.2 expected, 53.5 previous)
  • 10:00 am GMT: Euro Zone flash services PMI (53.1 expected, 52.8 previous)

See also:

U.S. Session Recap
London Session Recap

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