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The yen lost pips to its major counterparts as a lack of fresh catalysts inspired a bit of risk appetite in the markets.

  • AU CB leading index up by 0.5% vs. 0.0% growth in May
  • Dollar edges higher ahead of Jackson Hole meetings

Major Events/Reports:

Dollar and risk rallies across the board

With not a lot of economic reports to price in, Asian session forex traders concentrated on risk sentiment.

The yen lost pips across the board and market geeks have several reasons why. Some point out that Trump can regain grounds on his tax cut plans when Congress returns from its summer break in a few weeks, which pushed USD/JPY and other yen crosses higher.

The rallies might have also been due to Trump’s speech Monday night, where the POTUS announced his decision to increase forces in Afghanistan to “fight to win” instead of pulling out troops as he promised during the campaign. Some point out that a big policy change would’ve caused uncertainty in the markets.

And then there’s possible profit-taking ahead of this week’s Jackson Hole meetings. Some believe that Yellen will take the opportunity to hint at another rate hike in December, which could push the dollar even higher across the board.

Whichever the real cause was, risk sentiment improved for the dollar and the Asian bourses:

Nikkei is up by 0.08% to 19.408.50,
Australia’s A SX 200 is up by 0.31% to 5,743.60,
Shanghai index is up by 0.78% to 11,762.83, and
Hang Seng is up by 1.01% to 27.428.00.

Major Market Mover(s):

JPY

The low-yielding yen was one of the biggest losers as risk appetite improved across the board.

USD/JPY is up by 34 pips (+0.31%) to 109.25,
EUR/JPY is up by 41 pips (+0.32%) to 129.02,
GBP/JPY is up by 35 pips (+0.25%) to 140.80, and
CHF/JPY is up by 27 pips (+0.24%) to 113.46.

Watch Out For:

  • 7:00 am GMT: Switzerland’s trade balance (2.88B CHF expected, 2.81B CHF previous)
  • 9:30 am GMT: U.K.’s government borrowing (0.0B GBP expected, 6.3B GBP previous)
  • 10:00 am GMT: German ZEW economic sentiment (14.8 expected, 17.5 previous)
  • 10:00 am GMT: Euro Zone ZEW economic sentiment (34.2 expected, 35.6 previous)