Article Highlights

  • Australia’s home loans rises by 2.6% vs. 2.9% expected, 1.9% in November
  • China still on bank holiday
  • Speeches from RBA and BOJ officials move AUD and JPY
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Profit-taking was the name of the game, as the low-yielding currencies gave up pips to the high-yielders during the forex trading session.

Major Events:

Profit-taking but still in risk aversion mode – Though concerns over global economic growth and less chances of a Fed rate hike are still valid, it seems like market players are taking a breather from their shorts ahead of the weekend. If you recall, low-yielding currencies like the yen have been raking in pips, thanks in part to a lack of market-changing reports throughout the week.

RBA and BOJ on currency – Both Glenn Stevens from the RBA and Kuroda from the BOJ have tried to talk down their currencies today. The former hinted that the RBA is leaning towards the easing, while Kuroda had hinted that the yen’s recent gains are undesirable for the central bank. Forex traders had mixed reaction to the news. They completely ignored Stevens and pushed the Aussie higher across the board and panicked a bit over Kuroda’s statements and caused spikes and intraday gains among yen crosses.

Major Currency Movers:

JPY – The low-yielding yen saw profit-taking across the board and lost pips against its major counterparts. EUR/JPY extended the U.S. session’s gains and inched another 4 pips higher (+0.03%) while GBP/JPY jumped by 37 pips (+0.23%).

USD – The Greenback threw a couple of punches after getting beaten for most of the week. EUR/USD lost 30 pips (-0.27%), GBP/USD slipped by 11 pips (-0.08%), USD/JPY rose by 40 pips (+0.36%), and USD/CHF popped up by 21 pips (+0.22%).

Comdolls – The profit-taking theme extended to commodity prices and the comdolls and boosted the Aussie and Loonie higher against the lower-yielding currencies. It also didn’t hurt the Aussie that forex bulls mostly shrugged off Stevens’ dovish comments.

AUD/USD inched 4 pips higher (+0.06%) while USD/CAD fell by 17 pips (-0.12%). The Kiwi was an exception, as it fell by 22 pips (-0.33%).

Watch Out For:

  • 7:00 am GMT: German preliminary quarterly GDP (expected to rise by 0.3% like last month)
  • 7:00 am GMT: German final CPI not expected to move from -0.8%
  • 7:00 am GMT: German wholesale price index to grow by 0.2% after declining by 0.8%?
  • 9:00 am GMT: Italian preliminary GDP (expected at 0.3% vs. 0.2% previous)
  • 9:30 am GMT: U.K. construction output (2.1% expected vs. -0.5% previous)
  • 10:00 am GMT: Euro Zone quarterly GDP expected to show another 0.3% uptick
  • 10:00 am GMT: Euro Zone industrial production (0.3% expected vs. -0.7% previous)

See more:

U.S. Session Forex Recap

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