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With not a lot of major reports scheduled, Asian session forex traders ended up extending market themes from the previous session.

  • AU HIA new home sales up by 0.8% vs. 1.1% decline in March
  • New Zealand
  • Japan’s consumer confidence clocks in at 43.6 as expected, vs. 43.2 previous
  • Yuan retreats from seven-month highs

Major Events/Reports

Risk appetite spillover

As mentioned in my U.S. session recap, market players got a boost from not only a strong ADP report, but also a better-than-expected ISM manufacturing PMI. Of course, it also didn’t hurt that Trump’s plans to withdraw from the Paris Accord point to more activity for American companies.

The good vibes carried over to Asian session traders who had little to price in but yesterday’s moves and the upcoming NFP report.

Nikkei, in particular, breached its closely-watched 20,000 mark for the first time since December 2015 thanks to a combination of risk appetite and yen weakness.

  • Nikkei is now 1.78% higher at 20,214.50;
  • Australia’s A SX 200 is up by 0.94% to 5,791.90;
  • Hang Seng is up by 0.32% to 25,896, while the
  • Shanghai index is flat at 3,102.52

Chinese yuan retreats from Thursday highs

Offshore Chinese yuan retreated by 0.5% today after hitting its highest levels since October yesterday.

The People’s Bank of China (PBoC) set USD/CNY’s midpoint at 6.8070 today, lower than yesterday’s 6.8062 mark.

If you recall, offshore yuan prices hit a high of 6.7245 – a level not seen since October – presumably due to tighter liquidity conditions in Hong Kong and a bit of pressure from state-owned banks.

Analysts speculate that the move was meant to discourage yuan sellers after Moody’s downgraded China’s credit rating.

Major Market Mover(s):

JPY

The yen weakened further during the U.S. session as USD/JPY extended its gains and risk appetite pushed the other yen crosses higher.

USD/JPY is up by 23 pips (+0.21%) to 111.60, AUD/JPY is up by 32 pips (+0.39%) to 82.44, EUR/JPY inched 33 pips higher (+0.26%) to 125.19, and GBP/JPY popped up by 24 pips (+0.17%) to 143.71.

Comdolls

Overall risk appetite and better trading conditions for the yuan and higher iron ore prices kept commodity-related currencies afloat even as gold and oil prices slid lower.

AUD/USD inched 11 pips higher (+0.15%) to .7387, USD/CAD slipped by 9 pips (-0.07%) to 1.3513, and NZD/USD popped up by 10 pips (+0.14%) to .7071.

Watch Out For:

  • Italian banks out on National Day holiday
  • 7:00 am GMT: Spanish unemployment change (-110.2K expected, -129.3K previous)
  • 8:30 am GMT: U.K. construction PMI (52.7 expected, 53.1 previous)
  • 9:00 am GMT: Euro Zone PPI (0.2% expected, -0.3% previous)