ForexLive Asia FX news: USD loses more ground

Author: Eamonn Sheridan | Category: News

Forex and Bitcoin news for Asia trading Wednesday 14 February 2018

It was a quiet start in Asia but it soon warmed up.

The focus for the session was the Japanese Q4 GDP report and inflation expectations data from New Zealand.

The Japanese data was net a miss, but it was not all bad news

  • Private consumption came in better
  • Capex (business investment) continued to gain ... though it missed expectations
  • Net exports were a disappointment, but exports were solid its just that imports gained strongly

The yen did very little in immediate response to the date ... but let me come back to the yen in a moment.

The other data of note for the session was inflation expectations from the Reserve Bank of New Zealand. As I posted in the preview, Reserve Bank of New Zealand Assistant Governor McDermott had this to say on the data point:

That's a useful heads up, eh? Straight from the horses mouth!  

2 year expectations (the focus ... cause its thought to be relevant to the lag between RBNZ policy change and CPI ) came in a t minuscule higher read than the previous (the data is quarterly):

  • 2.11% compared to 2.02%

It was enough of a catalyst, however, to see NZD/USD marked higher and then for the gains to continue. NZD/USD is up 50-odd points from its session low as I update, a lot of this is USD weakness though. Which brings me back to the yen.

USD/JPY cracked under its overnight low circa 107.40. There had been some attempt at jawboning from Japan chief cabinet secretary Suga ... citing G7 and G20 concerns on volatility in forex, and how he was watching levels closely. Yeah, whatevs, dude ....

The yen found renewed buying, taking USD/JPY down to around 107.00 and EUR/JPY around 132.50. The USD lost ground as this was happening, EUR/USD to above 1.2380 and other currencies strengthening  against the big dollar also.

  • As I have pointed out earlier .... NZD a big gainer.
  • AUD, CAD, CHF, GBP and gold all higher against the dollar.
Local stocks found the going tough :
  • Nikkei fell to a 4-month low
  • Shanghai Comp fell 0.3%
And ... its not over. there is plenty to come from Europa and the US to move currencies:


And, if you'll allow me a plug for the Asian session tomorrow:

---

Long live cryptocurrencies? Five insights from the ASAC Fund