Article Highlights

  • Japan national core CPI stagnates in January vs. 0.2% decline expected, 0.1% uptick in December
  • Tokyo’s core CPI down by 0.1% in February vs. 0.0% expected, 0.1% decline in January
  • U.K. GfK consumer confidence down to 0 vs. 3 expected, 4 previous
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The dollar was the biggest loser during the Asian session, as forex traders priced in a risk-friendly trading environment and a couple of bullish reports.

Major Events:

New Zealand’s trade data – New Zealand shocked the forex bulls into action today, as its trade balance data surprised with an 8 million NZD trade surplus in January, a first in eight months. Analysts had expected a deficit of 271M NZD.

Details reveal a 5.9% increase in exports led by dairy and wood products. Meanwhile, imports also jumped by 7.2% though it was mostly offset by the decline in oil import prices. With 8 out of 10 major export categories recording higher values, the report painted a bright picture for the export-driven economy.

Japan’s inflation numbers – Three guesses on how Japan’s inflation is faring! The national core CPI came in at a big 0.0% in January after December’s 0.1% growth. Tokyo’s core CPI also disappointed with a 0.1% decline and increased speculations of further BOJ easing in the foreseeable future. Luckily for risk-friendly traders, the majority of market players chose to extend the optimism from the U.S. session and boosted the yen before a bit of profit-taking kicked in.

Profit-taking ahead of today’s events? – Whether it’s an extension of yesterday’s risk appetite or a bit of profit-taking ahead of today’s U.S. GDP report and G20 meetings in China, the low-yielding currencies seem to be taking steps back against their higher-yielding counterparts. Even commodities and equities reflected a bit of risk-taking with Nikkei up by 1.01%, Shanghai up by 0.43%, Hang Seng up by 1.63%, and Australia’s ASX only down by 0.12%. Read Forex Gump’s trading guide if you’re planning on trading today’s U.S. GDP release!

Major Currency Movers:

USD – The low-yielding Greenback got the brunt of the risk-taking vibe today. EUR/USD jumped by 19 pips (+0.17%), GBP/USD rose by 28 pips (+0.20%), and USD/CHF slipped by 12 pips (-0.12%).

JPY – The yen took a couple of hits on the back of risk appetite, but soon erased some of its losses near the end of the trading session.

USD/JPY hit a high of 113.22 before levelling off to 112.83 while EUR/JPY hit a high of 125.02 before settling to 124.79. Ditto for AUD/JPY, which jumped to 82.02 before closing at 81.69.

NZD – The Kiwi is the biggest winner of the lot, mostly thanks to New Zealand’s trade surplus surprise.

NZD/USD popped up by 47 pips (+0.70%), NZD/JPY jumped by 54 pips (+0.71%), GBP/NZD slid by 100 pips (-0.48%), and AUD/NZD dropped by 73 pips (-0.68%).

Watch Out For:

  • G20 meetings in Shanghai start today. Watch out for jawboning and other potential catalysts!
  • 7:45 am GMT: French consumer spending and preliminary CPI numbers generally expected to print better results than the previous month.
  • 8:00 am GMT: Spain’s flash CPI expected at -0.5% vs. -0.3% previous

See more:

U.S. Session Forex Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!