Forex news for Asia trading Thursday 11 August 2016
- Australian Treasurer Morrison blocks sale of electricity company to China
- RBNZ 'traffic light' guide to when they will intervene in the NZD
- Oil - Reuters reports Kuwait has dropped price for Asia to a 4 month low
- China bad loan ratio: 1.75% or 20%?
- NZ finmin English: Inflation targeting is more important than ever
- Australian bank bad loan concerns ticking higher
- RBNZ says it cut b/c of exchange rate pressures on the economy
- PBOC sets USD/CNY mid-point today at 6.6255 (vs. yesterday at 6.6530)
- Australia - Consumer Inflation Expectations (August): 3.5% (prior 3.7%)
- Bank of Korea leaves its key rate unchanged (at 1.25%)
- Meanwhile, in Canada: Maple syrup cartel to boost output
- Singapore central bank says current monetary policy remains appropriate
- Singapore Q2 GDP +0.3% q/q (annualised) (expected +0.8%) - lower forecasts
- RBNZ Ass. Gov. McDermott: High exchange rate was a key concern
- UK RICS House Price Index (July): 5 vs. 6 expected
- NZ - Food price index for July: -0.2% m/m (prior 0.4% m/m)
- RBNZ's Wheeler: Did not seriously consider a 50bp cut
- RBNZ showing how to fail at forward guidance
- New Zealand - RBNZ: CUT RATES by 25bp
- Trade ideas thread - Thursday 11 August 2016
- US stocks down with the Nasdaq leading the way
The Reserve Bank of New Zealand delivered the much telegraphed rate cut today, a 25bp cut and a promise of more to come, especially if the NZD rises (so we should get another one tomorrow, right? - joke). As soon as the cut was announced the NZD/USD jumped more than a cent; the market well positioned for a cut after RBNZ communication in past weeks and the immediate reaction was a short cover.
Links as the decision, press conference and more unfolded (read from bottom up):
RBNZ 'traffic light' guide to when they will intervene in the NZD
NZ finmin English: Inflation targeting is more important than ever
RBNZ says it cut b/c of exchange rate pressures on the economy
RBNZ Ass. Gov. McDermott: High exchange rate was a key concern
Since the initial reaction market movement has been more subdued, NZD/USD trading in a circa 0.7270/0.7300 range (give or take a few points). We haven't had much of a retrace/gap fill and the potential is there but may be contingent on how the USD behaves in Europe/UK time.
AUD/USD spiked higher with the NZD but settled back near where it was prior to the RBNZ announcement. As I write its testing towards the subsequent range low under 0.7700.
A Tokyo holiday today (markets closed) seemed to keep other major FX quite subdued. Late NY time saw a sudden dip in the USD/JPY to around 101 , but since then its been 101.05/101.35 (and is at the high end of the that range as I update ... and through 101.40 as I proofread the post).
EUR/USD ticked back toward its overnight high, but from 1.1190 its drifted off again to be near 1.1170 as I post. USD/CHF was subdued also.
Cable is little changed on the session after a 20 off point range.
Gold lost a few dollars, on session lows as of now under $1343.
The PBOC set the USD/CNY lower today; on the 1 year anniversary of the big yuan devaluation there was extra attention on today's 'fix'.
Regional equities:
- Nikkei - Japan holiday
- Shanghai +0.09%
- HK +0.18%
- ASX -0.91%
