Article Highlights

  • New Zealand trade surplus down from 367M to 117M in March vs. 405M expected
  • Australia’s quarterly CPI plunges from 0.4% to -0.2% vs. 0.3% growth expected
  • Australia’s trimmed mean CPI down from 0.6% to 0.2% vs. 0.5% expected
  • Japan’s all industries activity index down by 1.2% vs. 1.3% decline expected, 1.2% previous
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Forex trading was a mixed bag of nuts, as economic reports clashed with central bank speculations. Here’s what happened during the Asian session!

Major Events:

Australia’s inflation surprise – The biggest story of the hour is the Land Down Under printing a surprisingly weak quarterly inflation report.

Australia printed a 0.2% decline in consumer prices, which is the lowest reading since Q2 2012. Meanwhile, the core annual rate, which considers volatile items such as fuel, dropped to 1.55%, the lowest on record. Details reveal that the decline was broad-based, with oil, food, and clothing prices driving down the cost of goods and services.

The report raised expectations of the RBA possibly cutting its rates on its May 3 decision. Not surprisingly, the Aussie plunged across the board with barely any breather.

Dollar weakens ahead of the FOMC decision – The Aussie wasn’t the only one feeling the pain of interest rate speculations. With only a couple of hours away from the FOMC statement, market players are taking off their dollar bets. Though Janet Yellen and her gang are expected to keep their policies steady and even hint at a rate hike in June, investors lost a bit of confidence after seeing red marks on yesterday’s economic reports.

Major Currency Movers:

AUD – The Aussie took a one-two punch from Australia’s surprisingly low inflation and a drop in iron ore prices.

AUD/USD capped the session a full 100 pips lower (-1.29%) while AUD/JPY dropped by 147 pips (-1.71%) and AUD/NZD fell by 140 pips (-1.25%).

USD – The Greenback stepped a few pips back after Asian session traders took their cues from their U.S. counterparts and priced in weaker-than-expected data from Uncle Sam.

EUR/USD inched 9 pips higher (+0.08%), GBP/USD popped up by 10 pips (+0.07%), and USD/JPY dropped by 37 pips (-0.33%).

JPY – The low-yielding yen took advantage of the overall risk aversion in the markets.

EUR/JPY fell by 31 pips (-0.25%), GBP/JPY dropped by 42 pips (-0.26%), and CAD/JPY slipped by 23 pips (-0.26%).

Watch Out For:

  • 6:00 am GMT: Swiss UBS consumption indicator
  • 6:00 am GMT: German import prices (0.3% expected vs. -0.6% previous)
  • 6:00 am GMT: GfK German consumer climate (9.5 expected vs. 9.4 previous)
  • 8:00 am GMT: Euro Zone private loans (1.7% expected vs. 1.6% previous)
  • 8:30 am GMT: U.K. preliminary GDP (0.4% expected vs. 0.6% previous)
  • 10:00 am GMT: U.K. CBI realized sales (15 expected vs. 7 previous)

See more:

U.S. Session Forex Recap

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