Article Highlights

  • AU GDP (q/q): 0.9% vs. 0.8% expected, 0.2% previous
  • AU GDP (y/y): 2.5% vs. 2.4% expected, 2.0% previous
  • Lack of catalysts inspired profit-taking in short USD trades
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Price action was a mixed bag of nuts, as a lack of catalysts inspired profit-taking ahead of this week’s anticipated forex events.

Major Events:

Australia prints strong GDP numbers – The Land Down Under printed a 0.9% growth in Q3 2015, stronger than the 0.8% uptick that market players were expecting. Even the annualized figure beat estimates with a 2.5% growth vs. the 2.4% uptick expected.

A closer look reveals that a surge in exports and an improvement in consumer spending helped offset the losses from business investment. Though the RBA is optimistic that growth in non-mining sectors are picking up, the impact of mining is still definitely welcome. In fact, the report showed that it was the increase in mining activity that helped boost Australia’s exports in Q3. Good to know.

Profit-taking from high-yielding bets – While forex traders are all happy to sell the dollar at decreased prospects of a December rate hike, it seems that they’re not willing to hold on to their bets ahead of this week’s big events. The lack of catalysts during the trading session inspired profit-taking for those who aren’t willing to stick around the BOC and ECB print their interest rate decisions and Uncle Sam’s employment numbers are released.

Major Currency Movers:

USD – The Greenback gained across the board, as a round of profit-taking hit its higher-yielding counterparts. EUR/USD is down by 17 pips (-0.16%) and GBP/USD is down 18 pips (-0.12%). Even the low-yielding currencies gave up pips with USD/JPY up by 22 pips (+0.18%) and USD/CHF finding support at the 1.0275 area.

AUD and NZD – The Aussie shrugged off Australia’s upbeat GDP reading and even lost a couple of pips to its low-yielding counterparts. Ditto for the Kiwi, which didn’t find traction despite an increase in dairy prices.

AUD/USD slid by 26 pips (-.0.36%) while AUD/JPY stayed just above the 90.00 handle. Meanwhile, NZD/USD fell by 20 pips (-0.30%) and NZD/JPY inched 12 pips lower (-0.15%) throughout the session.

Watch Out For:

  • 9:30 am GMT: UK construction PMI (58.6 expected vs. 58.8 previous)
  • 10:00 am GMT: Euro Zone CPI flash estimate (0.2% expected vs. 0.1% previous)
  • 10:00 am GMT: Euro Zone core CPI flash estimate (1.1% expected like last month)
  • 10:00 am GMT: Euro Zone PPI (-0.4% expected vs. -0.3% previous)

See more:

U.S. Session Forex Recap

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