Forex news for Asia trading Thursday 23 September 2015

  • Asset manager says USD is overvalued, first Fed rate hike priced in
  • Deutsche Bank analyst says we now have a market driven Federal Reserve
  • USD/JPY dipping, back below 120
  • Oil analysts says oil in realistic range around $40 - 60 for next 15 months (WTI)
  • Bill Gross really wants the Fed to hike ... and quickly
  • PBOC sets USD/CNY mid rate at 6.3791
  • Sources report Wal-Mart is seeking price cuts from Chinese suppliers
  • BoA/ML economist on the Federal Reserve. Expect a December hike.
  • USD/JPY-anyone watching the triangle? Which way does it break?
  • Recap of ECB President Draghi's comments overnight
  • Trade ideas thread for Thursday 24 September 2015
  • Japan September Manufacturing PMI (flash): 50.9 (expected 51.2)

New Zealand:

  • Westpac on Fonterra boosting payout forecast & implication for RBNZ
  • RBNZ says its neutral interest rate models imply current settings are expansionary
  • NZ August Trade Balance: -1035m (-850m expected), also exports and imports
  • Fonterra sets 2014/15 milk payout at $4.40

The USD against EUR, GBP and CHF traded in narrow ranges.

There was more action in the USD/JPY and yen crosses. Morning trade was a tight range, 15-20 points or so, with the Nikkei opening lower after the 5 day break, in line with global stock market moves and, as of the lunch break, being unable to sustain any support, drifting lower still.

Japanese PMI (manufacturing, flash for September) came in at a disappointment on the headline result, even more so in the details for new export orders which were their weakest in 31 months.It was a yen negative, but the response, as it so often is for Japanese data, was minimal. In time, though, USD sellers emerged (perhaps on the failure for the yen to weaken), triggersing stops below 120.10 and 120.00 to take USD/JPY (and yen crosses) lower, testing below 119.90 before halting.

Not a huge range in USD/JPY, then, but a better one in the NZD. It gained on the announcement early in the session of the Fonterra boost to their forecast milk payment (see bullets, above) and after some sideways consolidation near the highs it gained further. A report from the RBNZ that the new neutral interest rate implied current rates were perhaps a bit too low was cited as a reason for the later gains in the NZD, which seems a bit of a stretch. The report is at the link above for further reading.

AUD gained a little on the session, halting its advance at the noted sell order level before drifting back to be barely changed on the session.

Gold gained through the day, oil did a little.

Regional equities:

  • Nikkei (Japan) -2.1%
  • HK -1%
  • Shanghai +0.27%
  • ASX +0.83%

Singapore was closed for a holiday today