- Hong Kong press: China and Australia discussing direct FX trading
- Japan May retail sales +3.6 y/y vs +2.9% y/y exp
- Fed’s Lockhart: Conditions don’t call for stronger Fed action
- UK to hand over 1.3B pound to EIB
- Former MPC member Goodhart: July bond buying “fairly odds on”
- Australia HIA home sales +0.7% m/m
- NZ business confidence hits 15-month low
- Australian job vacancies down 5.3% in May quarter
- Nikkei +1.2%, possibility of breaking 5-week high
- ASX 200 +0.1% after opening +0.7%
- NZD leads, USD lags
King Dollar took a thumping in Asia-Pacific trading. China is rapidly setting up systems to allow offshore yuan trading and news that plans are underway for a centre in Sydney sparked a round of USD selling. Month-end flows and worries about the weekend may have also been factors. A large US desk was said to be buying AUD and EUR in size.
EUR/USD chopped around 1.2470 but surged after Tokyo came on line, running to 1.2494 and then consolidating for several hours. A second, larger push emerged in the past hour, sparking a run through offers at 1.2510/20 to 1.2523.
The overall trade can’t be characterized as ‘risk on’ because proxies like EUR/JPY are relatively unchanged or lower. EUR/JPY touched a one-day low of 99.15 before rebounding.
It was a one-way trading in USD/JPY, sinking through support at 79.50 to as low as 79.33.
AUD/USD is at the highest levels in a week. Most of the gains came early in the session on the rumored US buying, climbing to 1.0115, chomping through offers at 1.0100.
