Article Highlights

  • RBNZ hikes its interest rates from 2.50% to 2.75%
  • Euro tips to its yearly highs despite weak data
  • Yen crosses recover some of their losses
  • Japanese and Australian data to influence Asian session trading?
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The major currencies started the trading session on a weak note as investors priced in the risk aversion factors, such as falling commodity prices and concerns over China’s growth, that were seen in the earlier trading sessions.

Fortunately for the bulls, the bears did some profit-taking ahead of the major reports on tap. Heck, EUR/USD even rose above 1.3900 and tested its two-year highs while EUR/GBP made new 2014 highs. The yen crosses also saw some buying with AUD/JPY and GBP/JPY closing 66 and 41 pips above their intraday lows respectively.

The Reserve Bank of New Zealand (RBNZ) provided the much needed action among the major currencies when it printed its monetary policy decision. The central bank raised its interest rates from 2.50% to 2.75%, its first rate hike in THREE years. Not only that, but the RBNZ has also upgraded its growth and inflation forecasts! What really got the bulls going though, was that Graeme Wheeler and his gang are hinting at more rate hikes to come.

Will the positive vibes continue throughout the Asian session? Japan’s core machinery orders as well as Australia’s MI inflation expectations and employment numbers all surprised to the upside and is currently supporting risk appetite. Watch out for China’s industrial production scheduled at 5:30 am GMT. The report is expected to print a 9.5% growth against last month’s 9.7% increase so keep an eye out for possible downside news!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!