Forex news for Asia trading Tuesday 19 July 2016

  • China - big export boom in ... errr ... Debt from special-purpose vehicles
  • Fitch says China's government reluctant to allow more corp defaults
  • Top ranked yuan forecaster says the decline is nearly over
  • RBA July meeting minutes: Awaiting updated forecasts for August
  • People’s Bank of China sets yuan reference rate at 6.6971 (vs. yesterday at 6.6961)
  • NZD traders - heads up for dairy auction during London time Tuesday
  • ECB meeting this week - what to expect. (Spoiler - No soup for you!)
  • Australia - ANZ Roy Morgan Weekly Consumer Confidence: 114.9 (prior 115.2)
  • Here's what the top 10 GBP forecasters expect. (Spoiler: Down.)
  • RBNZ new housing rules proposal - more detail
  • AUD and NZD slip a few points - RBNZ proposes housing limits to tighten
  • Brexit fallout - Johnson met with EU, talks were 'positive'
  • Roll up, roll up! Trade ideas thread for Tuesday 19 July 2016
  • Don’t let mean world syndrome sabotage your forex trading
  • Canada official says Forex will be discussed at the G20 China meeting
  • S&P index closes at another record high

An announcement from the RBNZ in early Asian trade (tightening lending restrictions on investment property, see bullets above) saw the NZD sold off heavily. It took AUD lower with it.

The news was read by the market as making it easier for the Reserve Bank of New Zealand to cut rates at their next policy meeting (August 11), NZD fell quickly to under 0.7080 and then traded lower still, all the way to circa 0.7020 before finding some support.

AUD/USD was sold alongside the NZD, but not to the same extent, for a while. Selling accelerated below 0.7565 and then again once the minutes of the July meeting were published. The market read the minutes as making the August monetary policy meeting very much a 'live' (likely rate cut) meeting. The July 27 CPI release (for Q2, we only get official inflation data once a quarter from Australia) is the next item to closely watch (see bullets above).

USD/JPY pulled back from just above 106.25, losing 50 or so points on no news or much at all out of Japan (markets there back from a,long weekend today). EUR and CHF did little today, but of course yen crosses were down.

Cable fell from above 1.3260 early, down toward 1.3200, again on basically no news flow.

Gold is little changed, oil slightly down.

The Nikkei came back from a holiday Monday and put on more gains today.

Regional equities:

  • Nikkei +0.30%
  • Shanghai -0.71%
  • HK -0.60%
  • ASX -0.23%