Article Highlights

  • AU Westpac consumer sentiment up by 2.3% vs. 0.1% uptick in January
  • AU new motor vehicle sales up by 0.6% vs. 0.1% previous
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The dollar gave back some of its gains from the previous session, as Yellen’s hawkishness translated to risk appetite during the Asian forex trading session.

Major Events:

Australia’s economic releases – Australia’s Westpac consumer confidence clocked in at 99.6 for the month of February, which is 2.3% higher than its January reading.

The measure of family finances compared to a year ago popped up by 4.0%, while family finances over the next 12 months inched 1.1% higher. Meanwhile, expectations for economic outlook over the next 12 months rose by 2.8% and the assessment of economic conditions in the next 5 years improved by 1.6%.

Overall, the release supported the notion that better employment numbers are translating to consumers getting more confident about loosening their purse strings.

A separate report showed that new motor vehicle sales also inched 0.3% higher in December after falling by 0.6% in November. A closer look tells us that sales for passenger vehicles declined by 0.2%, sports utility vehicles fell by 1.0%, and sales for other vehicles gained 0.3%.

Kuroda defends the BOJ’s programs – Bank of Japan (BOJ) Governor Haruhiko Kuroda was under the spotlight today when he appeared before the Diet to talk about the BOJ’s monetary policy programme.

The central bank head honcho wasted no time telling us that the BOJ is nowhere near done stimulating the economy. Specifically, he said that:

“Inflation remains distant from our 2 percent target, so it’s appropriate to continue with our powerful monetary easing to achieve the target at the earliest date possible.”

If you recall, he and his gang are aiming to drag Japanese government bond yields “close to zero” to help steer investors into investing in higher-yielding assets. Interestingly, Kuroda also took the opportunity to defend its currency interventions, saying that they’re abiding by a G7 and G20 agreement to use monetary policy solely for the domestic purpose of achieving price stability.

Overall risk appetite – The Asian bourses logged in gains after Janet Yellen’s stint in Senate. If you recall, the Fed’s head honcho highlighted Uncle Sam’s improvements in growth and employment and generally hinted that the Fed is on track to raise its rates multiple times this year.

The Nikkei is up by 1.09% and Australia’s ASX 200 is up by 0.93% while the Shanghai index is up by 0.31% and Hang Seng shot up by 1.26%.

Major Market Movers:

USD – Overall risk appetite and a lack of follow through from yesterday’s dollar rally weighed on the low-yielding currency against its major counterparts.

EUR/USD is up by 10 pips (+0.10%) to 1.0584, USD/CHF slipped by 11 pips (-0.11%) to 1.0059, and AUD/USD popped up by 26 pips (+0.34%) to .7677.

Watch Out For:

  • 10:30 am GMT: U.K. employment reports (unemployment rate, average earnings, claimant count change). Read Forex Gump’s trading guide on the event!
  • 11:00 am GMT: Euro Zone trade balance (22.5B EUR expected, 22.7B EUR previous)

See also:

U.S. Session Recap
London Session Recap

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