U.S. Session Forex Recap – Sept. 14, 2016

  • Nikkei report: BOJ to implement deeper negative rates?
  • BOJ official: Debate on additional easing to proceed cautiously
  • New Zealand current account deficit at 0.95B NZD vs. 0.30B NZD forecast

No data? No problem! Dollar bulls came out to play as risk aversion dominated the forex scene.

Major Events:

Nikkei report leaks BOJ plans? – The Nikkei Asian Review caused quite a stir among yen pairs as it shared some deets on what the BOJ might have up its sleeve for its monetary policy decision next week.

According to the report, the Japanese central bank might be exploring delving into deeper negative interest rates in order to stimulate economic activity. Recall that a report from the Sankei earlier this month indicated that policymakers are still divided on the idea of boosting stimulus, but a BOJ official reportedly said that they would have to weigh the pros and cons in terms of the yen’s exchange rate and economic performance.

Still, the BOJ could conclude that the advantages of lowering rates further outweigh the disadvantages, something that Governor Kuroda has been reiterating recently. A potential countermeasure, which might involve trimming the current level of JGB purchases, could be discussed. Apart from that, the BOJ is expected to retain its 2% inflation target but might drop its timeline of achieving this goal in two years.

Major Market Movers:

JPY – Yen pairs tossed and turned upon reading about the BOJ’s plans in the Nikkei report, but the Japanese currency ended higher against most of its peers.

USD/JPY climbed from 102.29 to a high of 102.75 (+0.45%), EUR/JPY is up from 114.88 to a high of 115.32 (+0.38%), GBP/JPY is down from 135.50 to a low of 134.49 (-0.75%), AUD/JPY tumbled from 76.94 to 76.12 (-1.06%), and NZD/JPY is down from 74.87 to 74.05 (-1.09%).

USD – The safe-haven Greenback was able to rake in gains when risk-off vibes started pushing currency pairs around.

EUR/USD slid from a high of 1.1241 to a low of 1.1203 (-0.34%), GBP/USD is down from 1.3250 to 1.3180 (-0.53%), USD/CHF popped up from .9719 to .9785 (+0.68%), AUD/USD fell from .7524 to .7442 (-1.09%), and USD/CAD is up from 1.3113 to a high of 1.3190 (+0.59%).

Watch Out For:

  • 12:30 am GMT: AU Westpac consumer sentiment index
  • 4:30 am GMT: Japan’s revised industrial production

See also:

London Session Recap

Asian Session Recap

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