Article Highlights

  • New Zealand markets out on Queen’s birthday holiday
  • Australia’s MI inflation gauge down by 0.2% vs. 0.1% uptick in April
  • Australia’s ANZ job ads picked up by 2.4% vs. 0.6% decrease in April
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Risk aversion was the name of the game during the Asian forex trading session, as the Brexit campaign gains momentum and the Asian markets reacted to last Friday’s NFP report.

Major Events:

Overall risk aversion – Thanks to a monumental miss in Uncle Sam’s latest non-farm payrolls (NFP) report, market players are scaling back their Fed rate hike speculations. The downbeat mood extended to the Asian markets today and weighed on overall risk sentiment.

The dollar gained back some of its Friday losses during the session. Meanwhile, Nikkei is down by 0.37%, Shanghai is down by 0.73%, and Hang Seng is down by 0.26%. Australia’s ASX is up by 0.78% thanks in part to the rise in gold prices as traders turn away from the Greenback.

Brexit fears gain momentum – The pound took a beating during the Asian session as traders priced in weekend polls showing more potential voters turning to the “leave” camp.

A poll printed by Observer/Opinium last Saturday showed that 43% of the voters are in favor of the U.K. leaving the EU while 40% are in favor of staying. The U.K. Polling Report website explained that the votes would reflect a 4-point lead in favor of the “stay” camp had Opinium not changed its methodology. Still, the damage is done and the uncertainty surrounding a possible Brexit has weighed on the pound.

A bit of jawboning from Japan – The yen lost pips across the board despite an overall risk-averse trading environment. Some are chalking up the overall weakness in high-yielding currencies as a “dead cat bounce” for the dollar while some are pointing to Yoshihide Suga’s comments today as the reason why the yen hasn’t gained any pips.

The Chief Cabinet Secretary warned that “rapid foreign-exchange moves are not desirable and stable moves are extremely important,” and that the government would “monitor the currency market with a sense of urgency.” While he’s no BOJ Chief Kuroda or Finance Minister Taro Aso, the warning from the top government spokesman may have gotten the attention of the yen bears.

Major Market Movers:

USD – Whether or not it’s a dead cat bounce or the impact of overall risk aversion, the dollar got some of its pips back after getting clobbered last Friday.

EUR/USD hit a high of 1.1373 before trading at 1.1342 while AUD/USD fell by 36 pips (-0.49%) and USD/CAD popped up by 28 pips (+0.22%).

GBP – Thanks to more pro-Brexit surveys over the weekend, the pound started the week with sharp losses against its major counterparts.

GBP/USD is down by 96 pips (-0.66%), GBP/JPY is down by 55 pips (-0.36%), and EUR/GBP is up by 48 pips (+0.61%).

JPY – The yen failed to take advantage of the overall risk aversion after Suga’s comments hinted at a BOJ currency intervention.

USD/JPY rose by 36 pips (+0.34%), EUR/JPY is up by 33 pips (+0.27%), and CAD/JPY is up by 14 pips (+0.17%).

Watch Out For:

  • 6:00 am GMT: German factory orders (-0.4% expected vs. 1.9% previous)
  • 8:10 am GMT: Euro Zone’s retail PMI to improve from 47.9?
  • 8:30 am GMT: Euro Zone’s Sentix investor confidence (7.1 expected vs. 6.2 previous)

See more:

U.S. Session Forex Recap

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