Article Highlights

  • PBoC sets yuan reference rate to lowest since May 2008
  • No major reports on tap during the session
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Asian session forex traders had a mixed trading session thanks to a lack of economic catalysts on the docket. Read on to see how the major currencies fared!

Major Events:

PBoC weakens the yuan –The People’s Bank of China (PBoC) set the yuan reference rate to 6.9508 per dollar, 0.32% weaker than yesterday’s 6.9289. That’s the weakest level since May 2008, yo! The move isn’t exactly surprising though, since the Dollar Index had reached a whopping 14-year high yesterday.

Mixed risk sentiment – With not a lot of data on the docket, Asian session market players were left to speculate on the impact of high U.S. bond yields and a strong dollar. Investors in emerging markets are starting to get jitters, as a strong dollar would mean that the economies’ debts will likely get more expensive. Of course, it also doesn’t help that U.S. bonds are now more attractive for investors who are seeking yields.

Nikkei, which once again tracked Wall Street and is supported by further weaknesses in the yen, rose by 0.61%, while Australia’s A SX 200 sustained a 0.10% dip. Hang Seng which was affected by more capital flight concerns due to a weaker yuan, slipped by 1.77%.

Major Market Movers:

USD – The Greenback got hit by a bit of profit-taking during a trading session devoid of any major catalyst.

EUR/USD is up by 6 pips (+0.06%) to 1.0431, USD/CHF slipped by 17 pips (-0.17%) to 1.0283, and USD/CAD fell by 13 pips (-0.10%) to 1.03327.

JPY – The low-yielding yen lost a couple of more pips against its higher-yielding counterparts after USD/JPY hit new highs during the U.S. session.

USD/JPY shot up by another 22 pips (+0.19%) to 118.13, EUR/JPY rose by 29 pips (+0.24%) to 123.21, and GBP/JPY inched back up to 146.60 after hitting a session low of 146.28.

Watch Out For:

  • 10:00 am GMT: Italy’s trade balance (4.21B EUR expected, 3.67B EUR previous)
  • 11:00 am GMT: Euro Zone final CPI expected to remain at 0.6%
  • 11:00 am GMT: Euro Zone final core CPI expected to remain at 0.8%
  • 11:00 am GMT: Euro Zone trade balance (25.2B EUR expected, 24.9B EUR previous)

See also:

U.S. Session Recap
London Session Recap

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