- Australian CPI trimmed mean +0.5% Vs +0.8% forecast
- Chances of RBA rate hike next week now virtually zero
- RBNZ expected to raise New Zealand rates tomorrow by 25bps
- South Korean June current account surplus $4.2 billion
- South Korean central bank seen buying USD/KRW
- Annual IMF report on China released: drops reference to Yuan being substantially undervalued
- UK economy: NIESR raises 2010 forecast but lowers forecast for 2011
- Regional stockmarkets up by between 0.25% and 1.9%
It has been a moderately busy session here in Asia today, with most of the interest centering on the release of Australia’s latest CPI figures. RBA boss Glenn Stevens said last week that the RBA would be watching the number closely, so if he is there wil be no rate hike next week as the trimmed mean showed a significant decline. This coming on the back of Monday’s PPI will seal the deal for further pauses.
AUD/USD fell from .9020 to .8950 immediately after the number and has been unable to bounce since as traders exit their long AUD positions against all other major currencies. Ranges: AUD/USD .8925/.9025; AUD/NZD 1.2203/1.2334.
EUR/USD drifted lower in early trade as early Tokyo booked profits in EUR/JPY after the big move higher in that cross overnight. EUR/USD fell to its session low after the Australian data but has since recovered as the short covering on all EUR cross pairings has continued. Ranges: EUR/USD 1.2968/1.3007; EUR/CHF 1.3767/90.
USD/JPY was unwilling or unable to test corporate offers at 88.00 and has slowly drifted lower albeit in fairly tight ranges. AUD/JPY selling has been outweighed by EUR/JPY buying on the crosses. Ranges: USD/JPY 87.66/93; EUR/JPY 113.75/114.30
Cable has been quietest of the major pairings in a 1.5564/96 range and EUR/GBP .8330/43.
Markets: Nikkei +1.9%, HK +0.6%, Shanghai +0.9%, Kospi +0.2%. Gold $1162/oz.
