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4 Jun 2014
Asia Recap: AUD GDP-induced spike short-lived
FXStreet (Bali) - The Aussie ends Asia unchanged after an initial spike as a response to better-than-expected Aus Q1 GDP, while Yen weakness extended.
AUD/USD traded in a quiet fashion ahead of the Australian Q1 GDP figures, which led to a 40 pips spike to set a session high of 0.9297, after a +1.1% print in Q1 vs +1% expected by the market. However, no interest to reinstate longs after the first reaction led to a re-adjustment of the exchange rate back to its pre-release level around 0.9260/65.
The Australian Bureaur of Statistics, on its official release noted: "In seasonally adjusted terms, the main contributors to GDP were Mining (up 8.6%), Financial and insurance services (up 2.8%) and Construction (up 3.0%). Mining contributed 0.9 percentage points to the increase in GDP while Financial and insurance services and Construction each contributed 0.2% points."
In view of Greg McKenna, Founder at GlobalFX: "While we can say that a large portion of the growth was in mining and while many are already saying that this is a bad thing, and worry that it can’t be continued, surely this is exactly what Australia wants – mining to persist in strength but not be so over the top that the RBA needs to dampen domestic demand by hiking rates any time soon."
Meanwhile, USD/JPY displayed a steady bullish tone, adding up on recent gains to the point of coming into contact with the level of resistance 102.70/75, and no signs of the bullish stampede receding. Anticipation that the revamping of the GPIF in Japan will see a more aggressive re-allocation into foreign assets, coupled with the rebound in the 10-year US bond yields and the rise above 15,000 in the Nikkei 225, is all weighing in the Yen, somehow offsetting the negative effects over the uncertainty on further QQE by the BoJ.
NZD/USD kept performing quite poorly, and while it held key support at 0.84/0.8420, the negative dairy auction by Fonterra on Tuesday, the NZD negative flows entering the Asian session after the key bullish technical breakout on AUD/NZD, and the possible mis-pricing of less-than-expected rate hikes by the RBNZ, are all reasons to keep the NZ Dollar under pressure. With regards to the rest of G10 currencies, no moves to report ahead of Europe.
Main headlines in Asia
The FX crisis: Market needs to be 'Fed' fresh clues
Australia AiG Performance of Services Index climbed from previous 48.6 to 49.9 in May
New Zealand ANZ Commodity Price: -2.2% (May) vs -4%
GPIF assets re-allocation limits USD/JPY downside - Nomura
Australia's Q1 GDP outstrips market expectations
Japan Markit Services PMI climbed from previous 46.4 to 49.3 in May
Transition from mining underway - Australian Treasurer
AUD/USD traded in a quiet fashion ahead of the Australian Q1 GDP figures, which led to a 40 pips spike to set a session high of 0.9297, after a +1.1% print in Q1 vs +1% expected by the market. However, no interest to reinstate longs after the first reaction led to a re-adjustment of the exchange rate back to its pre-release level around 0.9260/65.
The Australian Bureaur of Statistics, on its official release noted: "In seasonally adjusted terms, the main contributors to GDP were Mining (up 8.6%), Financial and insurance services (up 2.8%) and Construction (up 3.0%). Mining contributed 0.9 percentage points to the increase in GDP while Financial and insurance services and Construction each contributed 0.2% points."
In view of Greg McKenna, Founder at GlobalFX: "While we can say that a large portion of the growth was in mining and while many are already saying that this is a bad thing, and worry that it can’t be continued, surely this is exactly what Australia wants – mining to persist in strength but not be so over the top that the RBA needs to dampen domestic demand by hiking rates any time soon."
Meanwhile, USD/JPY displayed a steady bullish tone, adding up on recent gains to the point of coming into contact with the level of resistance 102.70/75, and no signs of the bullish stampede receding. Anticipation that the revamping of the GPIF in Japan will see a more aggressive re-allocation into foreign assets, coupled with the rebound in the 10-year US bond yields and the rise above 15,000 in the Nikkei 225, is all weighing in the Yen, somehow offsetting the negative effects over the uncertainty on further QQE by the BoJ.
NZD/USD kept performing quite poorly, and while it held key support at 0.84/0.8420, the negative dairy auction by Fonterra on Tuesday, the NZD negative flows entering the Asian session after the key bullish technical breakout on AUD/NZD, and the possible mis-pricing of less-than-expected rate hikes by the RBNZ, are all reasons to keep the NZ Dollar under pressure. With regards to the rest of G10 currencies, no moves to report ahead of Europe.
Main headlines in Asia
The FX crisis: Market needs to be 'Fed' fresh clues
Australia AiG Performance of Services Index climbed from previous 48.6 to 49.9 in May
New Zealand ANZ Commodity Price: -2.2% (May) vs -4%
GPIF assets re-allocation limits USD/JPY downside - Nomura
Australia's Q1 GDP outstrips market expectations
Japan Markit Services PMI climbed from previous 46.4 to 49.3 in May
Transition from mining underway - Australian Treasurer