Forex Asia Review – Yen lower after disappointing Japan trade data

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EURUSD opened in Asia at 1.4423 after its three week high from the prior session, then began a downtrend to as low as 1.4383 due to dovish comments by European Central Bank Governing Council member Ewald Nowotny, saying we are entering a period of slow growth and low inflation. His comments spurred speculation among investors that the ECB will take a pause in its monetary tightening cycle. Coupled with this news, falling Asian stock markets contributed to a damp market sentiment.

GBPUSD opened in Asia at 1.6452. After a stellar performance most of yesterday, gaining over 240 pips, sterling retraced from the fourteen-week high for a correction, pulling back to 1.6506 before steadying. EURGBP did little, opening at 0.8716 and trading a range between 0.8728 and 0.8709.

 

USDJPY opened Asia at 76.57 and closed at 76.67, remaining mostly in a range due to light volumes and did not strengthen against the dollar. Yen stayed in check due to Japanese trade balance data showed exports fell for a fifth straight month. Exports fell 3.3% from a year earlier, hurt by a strong yen. Japanese finance officials have been monitoring the markets closely and have already intervened once to curb the currency’s strength.

 

The Australian dollar fell from a two-week high against its U.S. counterpart as Asian stocks declined, curbing demand for higher-yielding assets. Meanwhile, commodities were lower, especially oil and copper prices dropped, hurting the outlook for Australia’s commodity exports. The aussie is a commodity-linked currency and was affected. AUDUSD opened at 1.0545 and fell to a low of 1.0470.