Forex news for Asia trading Monday 5 August 2019
- Japanese PM Abe says concerned by risk posed by foreign economic downside
- BTC update - Happy Monday
- PBOC says it is able to keep the yuan stable at a reasonable balanced level
- China said to ask State buyers to halt US agriculture imports
- Japan chief cabinet secretary Suga weighing in on unwanted yen strength
- NZ Treasury says increased the downside risk to near-term GDP growth forecasts
- Japan Ministry of Finance FX head says watching forex moves with sense of urgency
- GBP/USD forecast if a 'no-deal' Brexit
- South Korean FX authority says won moves are excessive and abnormal
- Gold bugs having a good day - XAU/USD cracks above $1,450
- China Caixin Services PMI 51.6 (expected 52.0), Composite 50.9 (prior 50.6)
- AUD lower ... iron ore futures trading lower
- PBOC slash the yuan - flows extend into yen now
- PBOC sets USD/ CNY reference rate for today at 6.9225 (vs. Friday at 6.8996)
- FX option expiries for Monday August 05 at the 10am NY cut
- New Zealand - ANZ Commodity Prices for July: -1.4% m/m (prior -3.9%)
- Australia monthly inflation gauge for July: 0.3% m/m (prior 0.0%)
- Hong Kong July PMI drops to its worst since 2009
- Japan Jibun Bank/Markit Services and Composite PMIs for July: 51.8 and 51.2
- Goldman Sachs on yen - forecasting lower still for USD/JPY
- Forecasts for the yuan (lower): 7.05 in September
- USD/CNH is hitting its highest since early 2017
- RBA monetary policy meeting Tuesday - preview (and plenty more from the RBA later in the week)
- Australia CBA/Markit PMI July Services 52.3 and Composite 52.1, final.
- RBNZ monetary policy meeting Wednesday - preview of a foregone conclusion
- Australia - AiG July 2019 Services PMI: 43.9 (prior 51.9)
- RBNZ monetary policy decision for July 2019 due this week - Shadow Board recommends on hold
- Weekend HK press - China questions whether to continue trade talks with the US
- UK special advisor to PM Johnson says MPs cannot stop no-deal Brexit
- Trade ideas thread - Monday 5 August 2019
- Monday morning opening forex levels - indicative prices 5 August 2019
- Almost all of Trump's advisors tried to talk him out of fresh China tariffs - report
- Video: Using volatility as a guide for the week beginning August 5
- Video: What's the trade after Trump's surprise China tariffs
The reverberations of US President Trump hiking tariffs on China goods continued in Asia to open the week here. Weekend reports (unconfirmed) that China is considering abandoning trade talks altogether did not help with sentiment.
The yuan weakened early, trade in the offshore yuan took USD/CNH to its highest since the start of 2017. Once the PBOC set its onshore yuan mid-rate for the session above 6.9, and at its highest for the year, there was further yuan weakening. The offshore traded well above 7.00, piercing 7.11 at one stage. This is a huge move.
It was accompanied by swings in major forex, most notably in a sharp drop for USD/JPY towards 105.80 after opening the week circa 106.60. AUD/USD had highs above 0.6800 before dropping to lows around 0.6750. It has managed to bounce back to circa 0.6780 as I update.
Equities also felt the pain, regional exchanges here all lower and overnight index trade on Globex heavy also. US yields fell again.
Further on the trade war front, reports circulated that Chinese authorities had asked State buyers to halt purchases of US agriculture products. I haven't seen confirmation of this. The news hit at the tail end of the moves and had little further impact. Watch for any more on this. If this happens you can nail the lid on the trade talks coffin shut.
Hong Kong is seeing its 9th consecutive day of declines for the Hang Seng, the weakness exacerbated by local protests. The run of losses is its worst in more than 20 years.
NZD/USD had a decent fall also but has since fully recovered. Again, not a lot of fresh news for it either. USD/CAD edged a little lower early but has rallied to highs above 1.3240.
Gold had a good session, as did BTC.
