ForexLive Asia FX news wrap: Early USD strength all over

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading for Tuesday 2 March 2021

The USD strengthened across the board in early Asian trade today, up against currencies, oil, and gold, with even Bitcoin dropping back a little after it had moved above $50K. As I post some of the USD gains have been given back against the yen and AUD. I'll come back to this.

There has been some attributing of the USD gain to comments out China, namely from the chair of China's banking regulator (see bullets above) saying the country's property sector has big bubbles and saying leverage will be reduced. The problem is that the USD up move came before the comments crossed on news wires. Perhaps those on the ground had them early but I think the simpler explanation is this is a back-fitted narrative.

We had some less than encouraging data out of Japan and Australia today (again, see bullets above) with misses on estimates for capex in Japan, and building approvals in Australia. It appears likely the miss on the Australian data was due partially to an unwinding of a strong month previously and also the flagged expiration of the HomeBuilder subsidy (that has subsequently been extended anyway).

The Australian dollar has bounced from its low following the Reserve Bank of Australia policy statement for the month. EUR, GBP, NZD, CHF have all not moved off their session lows to any great extent while USD/JPY is down from its earlier highs by around 15 or so points. CAD has been soft, weighed on also by the continuing weak oil prices during the session.

The RBA reiterated its current policy settings, and that there will be no cash rate hike until employment and inflation targets are achieved (suggesting again this is not likely until into 2024). 

aud rba 02 March 2021
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