Forex news for Asia trading Thursday 26 May 2016

There were some early moves in the currencies, but i'll get to that in a moment. The big news was the Tokyo AM drop in USD/JPY, drifting lower through 110.10 and then in a rush through 110 and down quickly to 109.60 before a few minutes of stability and then another drop to under 109.50 before finding some support.

Explanations were sought, and this FT article was pointed to (with comments from ... wait for it ... May the 16th!) as an explanation. I ain't buying it, but there you go. There was a lot sold and it fell heavily. It happens.

Yen crosses dropped alongside the USD/JPY fall.

EUR and CHF soon found some bids following the yen move, USD/CHF back under 0.99 and EUR/USD ticking up over 1.1180 today. During all this Brent crude managed a peek over $50. Cable was an island of relative calm.

NZD was an early mover on the session - NZD was marked lower immediately upon the release of Fonterra's forecast for the 2016/17 dairy payout coming in well under consensus expectation. NZD/USD remained under pressure over the following hours, dropping to under 0.6700. It was the announcement of the NZ budget that provided a bounce for the currency

The yuan (CNY) managed higher against the USD today, the PBOC dropping its mid-rate back from a 5-year USD/CNY high yesterday.

Gold didn't miss out, stronger today also.

And so to the AUD. It was Q1 capex day today; the headline came in at a resounding miss (down 5.2% against expectations of down 3.5%) but the details showed some glimmer of hope. The 6th estimate for investment in 2015/1, for example, showed its biggest upward revision in a decade. More in the bullets, above. Don't get me wrong, capex is still a stinker, but there were some (relative) bright spots in the data. AUD dropped a few points on the headline but after a half hour of stability it gained back above 0.7200 (again! .... Note there is a large option expiry due in NY today at 0.7210, for $1bn, this level may prove sticky for a while).

Regional equities:

  • Nikkei +0.49%
  • Shanghai -0.97%
  • HK -0.13%
  • ASX +0.07%