Forex news for Asia trading on Wednesday 12 May 2021

The fighting in the Middle East (Israel / Gaza) intensified with barrages of rocket attacks. Asia FX seemed as if it wanted to sit it out awaiting the US CPI data (due at 1230GMT today) but the geo-political events saw the USD gain across the major board. Escalation beyond Israel / Gaza has not been indicated yet but its something to keep an eye out for. As I post a statement from Israel says terrorist leaders from the Hamas military intelligence system were targeted and killed. With any luck the fighting has thus peaked, but of course, I am no expert. Oil markets showed little response but the yen did weaken a touch (admittedly intertwined with US dollar gains).

EUR, AUD, NZD, GBP, CAD, yen and CHF all fell against the dollar.

Of note for AUD traders, local bank CBA flagged that Australia might lose its AAA sovereign debt rating:

  • We think the rating remains on a very fine line, with a downgrade the more likely outcome.
  • The economic situation is clearly improving quickly
  • but the government has spent budget improvement on new stimulus

See bullets above for more on this.

Regional equities ... there was no sign of the Bank of Japan buying interest in the Topix.

Japan's Nikkei -0.6%, Topix -0.9%
China's Shanghai Composite -0.04%
Hong Kong's Hang Seng 0.16%
Australia's S&P/ASX 200 -0.65%

Forex news for Asia trading onWednesday12 May2021