The US dollar gave back a little of its gains it made on Wednesday US time during the session here on Thursday in Asia. EUR, AUD, CAD, NZD, GBP all added on a few ticks against the USD to varying extents. USD/JPY, on the other hand, has moved net higher on the day here after early weakness took it back under 128. USD/JPY is back above 128.60 as I update.

Philadelphia Fed President Harker spoke late in the US afternoon. Harker was in line with his FOMC colleagues, tipping 50bp rate hikes at the June and July meetings and a more ‘measured’ (i.e. 25bp) pace after that as likely.

On the data front we had another trade deficit from Japan (April month) with a record high level of imports (rising commodity prices and a weak yen combining for this result) while exports to China slumped due to covid controls there.

We also had the Australian labour market report. While net jobs added came in as a big miss (+4K vs. +30K expected) there was a notable rotation from part-time jobs (-88K) into full-time jobs (+90K). The big headline, though, was the jobless rate dropping to 3.9%, to its lowest since August of 1974. Participation did drop back, helping the rate down but its an impressive result nonetheless.

In China, Shanghai outlined (slow) steps towards easing. The city has turned the corner it seems.

audusd wrap 19 May 2022