Forex news for Asian trading on October 23, 2020
- Japans indices higher at the PM open
- China's FX regulator: Yuan FX is driven by actual demand, hedging needs.
- Japan/UK sign post Brexit free trade agreement
- Pres. Trump: Nancy Pelosi does not want to pass new stimulus
- PBOC sets USD/CNY reference rate for today at 6.6703 (vs yesterday's 6.6502)
- The Presidential debate begins.
- Reuters poll: Eurozone GDP to grow 2.1% in Q4 and1.0 present in Q1
- Japan national CPI year on year 0.0% vs. 0.0%'s estimate
- Sen. Maj. Leader McConnell: There is not enough time for a vote before election
- GfK consumer confidence -31 vs -25 in September
- CBA Australia PMI manufacturing for October (P) 54.2 vs. 55.4 last month
- WH Chief of Staff Meadows: Covid relief bill negotiations have entered a new phase
- New Zealand third-quarter CPI rises by 0.7% vs. 0.9% estimate
- ForexLive Americas FX news wrap: USD regains some lost ground
Fundamentally today, New Zealand CPI came in weaker than expectations. That helped to put a lid on the NZDUSD although with a 22 pip trading range, I can't honestly say it was a route to the downside. Nevertheless the pair is trading lower by about 13 pips.
In Australia, the PMI data for manufacturing services and composites generally came in better-than-expected and certainly well above the 50 level defining contraction and expansion for each of the measures (manufacturing came in at 54.2, services came in at 53.8, composite came in at 53.6). The AUDUSD moved higher but lost upside momentum and came back down toward support defined by the 200 hour moving average at 0.71086. The 100 day moving average is at 0.7105. The price is trading at 0.7111.
In other data, Japan CPI data continue to show stagnant inflation with the core measure at -0.3% year on year. That story remains the.
The big event for the new trading day happened in the US where Pres. Trump and former VP Biden had their 2nd presidential debate.
On the back of the 1st debate - which many considered the equivalent of a dumpster fire (and that is putting it in a good light) - the candidates debated without all the interruptions and childlike misbehaving (mostly from Pres. Trump). Of course, the debate today muted the microphone when each candidate was making their initial remarks. A another difference was that the moderator did a good/great job of controlling the flow. Honestly, although there is always the attraction of a train crash in a weird way, not having one today was somewhat of a relief.
As a result, pessimism before the debate had the S&P futures modestly lower, stalled the prices turned back into the black (modestly).
With the move higher in stocks, the USD - which was higher ahead of the debate on flight to safety flows, saw some modest weakening off its highs.
Having said that, the greenback is still ending the first 1/3 of the new trading day higher. That may be as a result of the OTHER story in the US - namely the coronavirus stimulus deal which seems to still have doubters on the GOP and Dem sides. That story will play out with more details during the New York session later today. However, for a moment, the focus was diverted from that problem, and focused on the the debate.
With debates now over, the focus over the next 11 days will be on a miracle deal and then the election which is not just 11 days away.
Wishing everyone a safe and happy weekend.
