Article Highlights

  • NZ manufacturing sales (q/q): 4.2% vs. 1.0% previous
  • Japan bank lending: 2.3% as expected vs. 2.5% previous
  • Japan current account: 1.46T JPY vs. 1.6T JPY expected, 1.47T JPY previous
  • Japan final GDP (q/q) adjusted to 0.3% vs. 0.1% expected, -0.2% initial reading
  • AU NAB business confidence: 5 vs. 3 previous
  • AU NAB business conditions up from 9 to 10
  • UK BRC retail sales monitor: -0.4% vs. 0.5% expected, -0.2% previous
  • China trade balance: 54.1B USD vs. 63.5B USD expected, 61.6B USD previous
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Risk aversion continued to grip the markets during the Asian session as forex traders digested China’s weak trade data.

Major Events:

China’s trade balance report – Data released a few hours ago revealed that trade surplus of the world’s second largest economy had shrunk from $61.64B in October to $51.4B in November when analysts had been expecting a $64B surplus.

A closer look reveals a fifth consecutive monthly decline in exports, this time by 3.6% (3.7% annually), when market players had only been expecting a 2.9% dip. Meanwhile, imports also showed weakness with its 6.8% decline (vs. 5.0% downtick expected).

Overall risk aversion – Market players were already doing a great job at spooking themselves even before China’s trade data weighed on risk sentiment. You see, yesterday’s concerns over oil and other commodity prices carried over to stock trading and pulled the Asian bourses to negative territory. Not surprisingly, this made forex traders reluctant to buy high-yielding currencies across the board.

Major Currency Movers:

JPY – A fresh bout of risk aversion drove traders to the low-yielding yen. The Greenback would have made for another good candidate, but uncertainty over the Fed’s next rate decision kept some traders on the yen’s side.

USD/JPY is down by 19 pips (-0.15%), EUR/JPY is down by 21 pips (-0.16%), and GBP/JPY is down by 52 pips (-0.28%). Heck, even CHF/JPY is down by 26 pips (-0.21%)!

AUD – Not even a better-than-expected NAB business confidence numbers were enough to save the Aussie for the comdoll bloodbath. Then again, China’s headlines did pop larger than any Australian data today.

AUD/USD is down by another 35 pips (-0.48%), AUD/JPY is down by 57 pips (-0.64%), EUR/AUD is up by a whopping 71 pips (+0.47%), and AUD/NZD is down by 26 pips (-0.24%).

CAD and NZD – The Aussie wasn’t alone in the dumps during the trading session. Further declines in oil prices and uncertainty over the RBNZ’s monetary policy decision due this week kept traders further away from the comdolls.

USD/CAD popped up by a few more pips above 1.3500 while CAD/JPY slipped by 17 pips (-0.19%). Meanwhile, NZD/JPY fell by 32 pips (-0.39%) and NZD/USD stayed below the .6650 mark.

Watch Out For:

  • Italy on Immaculate Conception holiday
  • 7:45 am GMT: French trade balance
  • 8:00 am GMT: U.K. Halifax house price index (0.3% expected vs. 1.1% previous)
  • 9:30 am GMT: U.K. manufacturing production (-0.2% expected vs. 0.8% previous)
  • 9:30 am GMT: U.K. industrial production (0.1% expected vs. -0.2% previous)

See more:

U.S. Session Forex Recap

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