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3 Jun 2014
Asia Recap: RBA neutral, AUD seeks 0.9275
FXStreet (Bali) - An undefined Asian session, with currencies resting in familiar ranges, with the only little excitement being moves in the Australian Dollar post domestic data and the RBA policy decision.
AUD/USD opened just below the 0.9250, first whipsawing back and forth over 30 pips in better-than-expected current deficit account, which is likely to contribute in a rosier GDP tomorrow, while Aus retail sales, which came unchanged at -0.2%, did little to stimulate prices. We also had a downbeat Chinese HSBC final reading, although it only caused a short-lived retreat. After the early volatility, it was the turn to react to the RBA monetary policy decision, which offered no surprises with rates stable at 2.5%, the RBA keeping a clear neutral bias, while noting that "the exchange rate remains high by historical standards, particularly given the further decline in commodity prices." Eventually, buyers outweighed the initial selling pressure to post a session high of 0.9270.
USD/JPY traded with barely any action, consolidating within a tight range above the 102.35, with some tepid attempts to break the line of support at 10235, although no follow through was observed ahead of the European session. The Nikkei 225, on the heels of Monday's breakout of 15,000, failed to act as a guide today, with the index showing subdued activity just above the big round number, keeping most of its gains after a positive open. The index is headed into the close over 0.85% higher. It is important to note that a break of 15,313 on Nikkei would complete a double bottom, while attention is also on the 10-year US bond yields, with further recoveries now contingent to the ability of bond sellers to break above 2.57-2.59% on the yield, which would most likely allow further bearish momentum in the Yen crosses.
As per the rest of G10 currencies, nothing to see ahead of Europe, with the New Zealand Dollar still vulnerable following the breakout of 0.8525/30 support level last week. Today's NZ terms of trade, which came at a 40-year high, failed to produce much of a bounce in the currency, a communication that the bearish sentiment is still present. Meanwhile, the Euro retains the bearish outlook ahead of Thursday's ECB meeting.
Main headlines in Asia
New Zealand Terms of Trade Index below forecasts (1.9%) in 1Q: Actual
Fresh 40-year high in NZ terms of trade - BNZ
Australian retail sales in line with expectations
Australia Current Account Balance registered at -5.7B above expectations (-7B) in 1Q
China HSBC PMI (final) lower-than-expected
Japan Labor Cash Earnings (YoY) above expectations (0.6%) in April: Actual (0.9%)
Most analysts expect further BoJ QQE in 2014 - Reuters poll
RBA: Period of interest-rate stability
AUD/USD opened just below the 0.9250, first whipsawing back and forth over 30 pips in better-than-expected current deficit account, which is likely to contribute in a rosier GDP tomorrow, while Aus retail sales, which came unchanged at -0.2%, did little to stimulate prices. We also had a downbeat Chinese HSBC final reading, although it only caused a short-lived retreat. After the early volatility, it was the turn to react to the RBA monetary policy decision, which offered no surprises with rates stable at 2.5%, the RBA keeping a clear neutral bias, while noting that "the exchange rate remains high by historical standards, particularly given the further decline in commodity prices." Eventually, buyers outweighed the initial selling pressure to post a session high of 0.9270.
USD/JPY traded with barely any action, consolidating within a tight range above the 102.35, with some tepid attempts to break the line of support at 10235, although no follow through was observed ahead of the European session. The Nikkei 225, on the heels of Monday's breakout of 15,000, failed to act as a guide today, with the index showing subdued activity just above the big round number, keeping most of its gains after a positive open. The index is headed into the close over 0.85% higher. It is important to note that a break of 15,313 on Nikkei would complete a double bottom, while attention is also on the 10-year US bond yields, with further recoveries now contingent to the ability of bond sellers to break above 2.57-2.59% on the yield, which would most likely allow further bearish momentum in the Yen crosses.
As per the rest of G10 currencies, nothing to see ahead of Europe, with the New Zealand Dollar still vulnerable following the breakout of 0.8525/30 support level last week. Today's NZ terms of trade, which came at a 40-year high, failed to produce much of a bounce in the currency, a communication that the bearish sentiment is still present. Meanwhile, the Euro retains the bearish outlook ahead of Thursday's ECB meeting.
Main headlines in Asia
New Zealand Terms of Trade Index below forecasts (1.9%) in 1Q: Actual
Fresh 40-year high in NZ terms of trade - BNZ
Australian retail sales in line with expectations
Australia Current Account Balance registered at -5.7B above expectations (-7B) in 1Q
China HSBC PMI (final) lower-than-expected
Japan Labor Cash Earnings (YoY) above expectations (0.6%) in April: Actual (0.9%)
Most analysts expect further BoJ QQE in 2014 - Reuters poll
RBA: Period of interest-rate stability