Article Highlights

  • NZ food price index up by 0.2% vs. 2.8% growth in January
  • Japan’s core machinery orders slips by 3.2% vs. 0.5% growth expected, 2.1% uptick in December
  • Japan’s PPI up by 1.0% as expected vs. 0.5% gain in January
  • Japan’s tertiary industry activity shows 0.0% growth vs. 0.2% uptick expected, -0.3% previous
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The dollar extended its weakness against its major counterparts, as Asian session forex traders caught up to their U.S. and European counterparts.

Major Events:

Japan’s data releases – Earlier today Japan printed its core machinery orders and PPI numbers. The former clocked in a surprising 3.2% dip in January, which is not only weaker than December’s 2.1% increase but also marks the fastest decline in five months. This also translates to an 8.2% decline from a year earlier, which is the biggest decline in eight months.

The core machinery orders report is notorious for being volatile, but its trends is widely seen as a leading indicator of capital spending in the next six to nine months. If you recall, capital expenditure grew at its fastest pace in nearly three years in Q4 2016 though private consumption remained weak. The government is hoping that higher capital expenditure would mean more jobs and eventually more spending from consumers in the world’s third largest economy.

Meanwhile, Japan’s Corporate Goods Price Index (kinda like its PPI report) showed that factory gate prices inched 0.2% higher from January to February, a bit lower than the previous month’s 0.6% uptick. On an annualized basis, its PPI report rose by 1.0% compared to last month’s 0.5% growth.

Despite another month of growth, the CGPI report generally showed minimal chances that higher producer prices will translate to higher consumer prices. Not good for the BOJ, who is looking to boost overall consumer prices in Japan.

Dollar carnage continues – With not a lot of data on the docket, Asian session market players extended last week’s moves. That is, they continued to take profits from their long dollar trades after a strong NFP report and continued to price in rumors of the ECB raising its interest rates even before they’re done with their QE program. See, Reuters cited unnamed sources saying that the ECB did discuss the option, but that it was “brief, and there was not broad support for the idea.”

Market Movers:

USD – The dollar continued to lose pips against its major counterparts as Asian session traders caught up to last Friday’s intraday trends.

EUR/USD is up by another 13 pips (+0.12%) to 1.0697, USD/CHF dropped by another 13 pips (-0.13%) to 1.0087, and GBP/USD inched 8 pips higher (+0.06%) to 1.2187.

The Greenback also lost pipss against the comdolls with AUD/USD popping up by 23 pips (+0.31%) to 1.7569 while NZD/USD finished the mid-day day trade at .6938 after dipping to a session low of .6913.

Watch Out For:

  • 9:00 am GMT: Euro Zone industrial production (-0.6% expected, 1.4% previous)
  • 1:30 pm GMT: ECB’s Draghi to make a speech in Frankfurt

See also:

Last Week’s Top Forex Movers

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

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