Asian Session Forex Recap – Nov. 29, 2016

  • AU HIA new home sales drops to two-year lows in October vs. 2.7% uptick in September
  • BOC’s Poloz sees higher uncertainty for Canada’s economy after Trump’s win

Forex price action was a mixed bag of nuts, as market players continue to brace for this week’s top-tier events.

Major Events:

Slight risk aversion – Between OPEC’s highly-anticipated meeting, the U.S. GDP and NFP reports, and Italy’s referendum this weekend, there’s no shortage of possible catalysts that might affect the major currencies.

This, along with a lack of economic releases during the Asian session, is probably why traders continue to take profits from their dollar and equities bets. Nikkei was hit by the yen strength, while other Asian bourses simply tracked Wall Street’s weak close.

Nikkei is down by 0.26%, Australia’s A SX 200 is down by 0.13%, Hang Seng is down by 0.23%, while the Shanghai index managed to gain 0.08% as of writing.

Oil prices also continue to slip ahead of the OPEC meeting. Brent crude oil is down by 0.96% to $48.74 while U.S. crude oil is also down by 0.83% to $46.70.

Speech by BOC’s Poloz – Bank of Canada (BOC) Governor Stephen Poloz inspired volatility among Loonie pairs earlier today when he hinted that “heightened uncertainty” persists even after Trump has won the elections.

Poloz was generally confident in his interviews, saying that the economy is on track to keep its 2% quarterly growth average. Not only that, but he also believes that, unless there’s strong catalysts like the oil price shock, inflation can go “back at target” by around mid-2018.

But what caught the investors’ attention were his remarks over the impact of Trump winning the elections. Though he and his team are still waiting for “concrete” policies, he has also acknowledged that there will be “heightened uncertainty” until they hear more from Trump.

Major Market Movers:

CAD – The Canadian dollar received a one-two punch from lower oil prices and Poloz’ slightly bearish remarks.

USD/CAD is up by 14 pips (+0.10%) to 1.3433, EUR/CAD popped up by 14 pips (+0.10%) to 1.42321, and NZD/CAD shot up by 18 pips (+0.19%) to .9503.

JPY – A weak Wall Street close pushed the yen higher at the start of the day, but risk-takers soon stepped up and pushed yen crosses a bit higher.

USD/JPY slipped to 111.62 before reaching 112.10, GBP/JPY fell to a low of 138.52 before climbing back up to 138.95, and EUR/JPY fell to 118.55 before finishing at 118.77.

Watch Out For:

  • 8:00 am GMT: German import prices (0.6% expected, 0.1% previous)
  • TBA: German preliminary CPI (0.1% expected, 0.2% previous)
  • 8:45 am GMT: French consumer spending (0.2% expected, -0.2% previous)
  • 9:00 am GMT: Spanish flash CPI (0.5% expected, 0.7% previous)
  • 10:30 am GMT: U.K. net individual lending (4.8B GBP expected, 4.7B GBP previous)
  • 10:30 am GMT: U.K. mortgage approvals (66K expected, 63K previous)

See also:

U.S. Session Recap
London Session Recap

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