ForexLive Asia FX news wrap: AUD loses bids as news and data worsen

Forex news for Asia trading on Wednesday 21 July 2021

• US Deputy State Secretary says the S will continue o engage with Chinese officials
• Australian dollar a poor performer in Asia trade
• Japan trade balance data recap - exports a positive for the country
• Australian Olympic athlete suspended for returning a positive test ... for cocaine
• BOJ speech - Deputy Governor Amamiya: Japan's Economy and Monetary Policy
• Australia Retail Sales for June, preliminary: -1.8% m/m (expected -0.5%)
• PBOC sets USD/ CNY mid-point today at 6.4835 (vs. yesterday at 6.4855)
• Australia coronavirus - Sydney new daily case number jumps more than 40% in the past 24 hours
• Morgan Stanley short AUD/USD targeting a move towards 0.7000
• Australia - Westpac leading indicator for June: -0.07% m/m (prior -0.06%)
• (Reuters poll) Australian GDP is expected to grow just 0.1% in Q3, slashed from 0.9%
• BOJ June meeting minutes
• Japan trade balance for June Y 383.2bn (expected Y 460bn)
• South Korea first 20 days of July exports per working day +32.8% y/y
• US Senate to vote on infrastructure Wednesday (after 2.30pm Washington time)
• WSJ reprt that a US-German Deal on Russia’s Nord Stream 2 Pipeline is expected soon
• Lloyds Bank survey shows a slowing economic recovery in the UK despite loosening
• Australia coronavirus - lockdown state Victoria reports jump in new cases
• Australian retail sales data due today - what to expect (spoiler ... sad)
• US Dem Senator Manchin says the two sides are not far apart in infrastructure negotiations
• Headline: Bitcoin mining isn’t nearly as bad for the environment as it used to be
• "Study says" that one shot of J&J vaccine is ineffective against Delta coronavirus variant
• Trade ideas thread - Wednesday 21 July 2021
• Private oil survey data shows headline build in crude oil inventory
• ICYMI - Mastercard to make conversion of cryptocurrency to fiat currency simpler
• ICYMI - EU is looking to ban anonymous crypto asset wallets

The Australian dollar was the session's biggest loser as a steady drip-feed of bad news and data weighed. Australia's largest and second-largest population cities and states both saw a rise in new coronavirus cases in the preceding 24 hours despite both being in lockdown. This comes against the background of Australia being at the bottom of the list amongst OECD countries for vaccination rate, 38th out of 38. The rate is expected to accelerate in the coming months as more Pfizer vaccines come into the country. On the increase in cases, 110 in NSW and 22 in Victoria; Victorian authorities tried to cushion the result reasoning all new cases were traced to existing cases.

Further, around 50% of Australia's population is now in lockdown. Data for retail sales in June, when lockdowns were not nearly so widespread came in much worse than expected (-1.8% m/m vs. -0.5% as the median estimate), so as the number of shut-ins has increased so a worse result is expected in July.

AUD/USD traded down from highs circa 0.7340 to approach its overnight low around 0.7300 and while there are bids ahead of the figure it has not bounced (as I update). It looks ugly. 

NZD/USD is down a few points with AUD, not nearly as much. While New Zealand is seeing no new cases and the RBNZ is expected to hike soon to address rapidly rising inflation the Australian experience is a pointer to the risk NZ does, still, face.

EUR, GBP, CAD have all lost a little against the USD. Regional equities steadied following the good lead from Wall Street on Tuesday.