Forex news for Asia trading Wednesday 22 July 2015

Australia:

  • RBA Stevens' Q&A comments: Neutral rate lower than previous
  • Australian Financial Review: RBA's Glenn Stevens says growth below 3% is new normal
  • RBA Gov. Stevens: Further cuts in rates remain on the table
  • BNP give 5 reasons why the AUD remains vulnerable

  • Australia Q2 inflation data: Headline CPI 0.7% q/q (vs. +0.8% expected)

  • Australia - Westpac Leading Index for June: 0.0% m/m (prior was -0.1%)

  • Conference Board Leading Economic Index for China June: +1.0% (prior +1.1%)
  • China data - MNI business confidence -8.8% m/m
  • BNZ cuts it forecast for Fonterra's 2015/16 dairy payout to $NZ3.80/kg
  • Reuters survey: 40% of firms plan to boost capital expenditure
  • ANZ: RBNZ will cut tomorrow, may remove "unjustified", "unsustainable" comments on NZD
  • Gold: Goldman Sachs' Currie says worse is still to come, could fall under $1,000
  • BOJ's new measure of CPI should give it a boost, maybe keep bank on hold longer
  • API crude oil inventories: rise 2.3mln barrels
  • Apple results - Q3 EPS $1.85 (vs. $1.81)

EUR, GBP and CHF all shared a similar sort of pattern today, strengthening a little against the USD in the early part of the Asian session, before retracing as I update. not that there ranges were much, all quite subdued here.

AUD and NZD, though, were more active.

After sideways moves during the earlier part, the AUD and NZD both jumped after the Australian Q2 CPI data. The data indicated restrained inflation pressures in Australia, so the higher AUD and NZD were not sustained. AUD/USD soon lost around 60 points, a less dovish than expected Glenn Stevens (Governor of the Reserve Bank of Australia) helping it dip.

Two points in particular stood out (for me, at least) in Stevens' speech today:

  1. he said further rate cuts were still on the table, but noted financial stability concerns surrounding the low level of rates
  2. And, that Australia may have to become accustomed to a new, lower 'normal' rate of growth (see bullets, above)

USD/JPY lost ground from mid-morning in Tokyo, following on from its losses in the overnight. there's an interesting point made in the bullet (above) about the BOJ maybe being on hold for longer as it adopts a new measure of inflation.

Oil remained heavy throughout the session. it got a poke lower late in NY from the API inventory data. Gold, too ... heavy metal today. Its back under $1100.