Back
28 Feb 2014
Asia Recap: Yuan selling weighs on the Aussie
FXStreet (Bali) - The Australian Dollar was the main mover in Asia, with further losses in the Chinese Yuan weighing on the Oceanic currency.
AUD/USD opened on a bullish undertone following the recovery off 0.89 in the last London session - solid bids from option players reportedly defending the level -, with renewed momentum added on a dovish Yellen along US hours. In Asia, an initial stops-driven move through 0.8975 - highest at 0.8988 - saw a fair number of Thursday's capex sellers forced out of the market before sellers stepped in to regain the 0.8970 key area, and from there, the sharp spike in USD/CNY - within a hair of its +1% limit up for the day - did the rest, causing a sharp decline down towards 0.8845/50, session low. Thin month end liquidity may have helped to over stretch the move. AUD still looks vulnerable to further losses, especially as rumours increase over an immediate USD/CNY band widening. AUD traders should be cautious to let positions open Friday ahead of the weekend, as Saturday the China PMI will be published, with a reading below 50 possibly exacerbating Aud's pain.
The Japanese Yen was steadily bid as the sharp spike in the USD/CNH revived emerging market concerns, thus causing a sense of risk aversion across main equity indexes, leading the Nikkei 225 into the red, with losses accelerating post lunch trading, currently down -1.20% ahead of the closing bell. The unrest in Ukraine was also referred as another reason strengthening the case for a risk-off environment in Asia. USD/JPY is fast approaching 101.40/50 - importer bids reported -,an area that has proven reliable ever since the level regained last Feb 5. From a broader perspective, the 103 - 100.80 range prevails. On the fundamental front, inflation numbers in the Tokyo area continues to pick up in Feb, while Jan's price levels nationwide were stable.
The New Zealand Dollar was one of the big winners in Asia along with the Yen, immune to the EM/China jitters as New Zealand continues to release very strong economic indicators. The last evidence came today, when we learnt that business confidence in the country stands at the highest level since 1994 after a monster jump in AZ Business Confidence for February, which came at 70.8 vs 64.1 last, while ANZ Activity Outlook for February saw a +58.5 vs 53.5 last.
Main headlines in Asia
New Zealand's building permits decline in January
Tokyo inflation up, nationwide prices stabilize
Japan January Retail Trade s.a (MoM) rises to 1.4% vs -1.2%
NZ business confidence highest since 1994
United Kingdom Gfk Consumer Confidence steadies at -7 in February
Aust Private Sector Credit 0.4% m/m vs 0.5% exp
USD/CNY nears limit-up area, AUD selling may ease
Yuan slides lower taking the Aussie with it
AUD/USD opened on a bullish undertone following the recovery off 0.89 in the last London session - solid bids from option players reportedly defending the level -, with renewed momentum added on a dovish Yellen along US hours. In Asia, an initial stops-driven move through 0.8975 - highest at 0.8988 - saw a fair number of Thursday's capex sellers forced out of the market before sellers stepped in to regain the 0.8970 key area, and from there, the sharp spike in USD/CNY - within a hair of its +1% limit up for the day - did the rest, causing a sharp decline down towards 0.8845/50, session low. Thin month end liquidity may have helped to over stretch the move. AUD still looks vulnerable to further losses, especially as rumours increase over an immediate USD/CNY band widening. AUD traders should be cautious to let positions open Friday ahead of the weekend, as Saturday the China PMI will be published, with a reading below 50 possibly exacerbating Aud's pain.
The Japanese Yen was steadily bid as the sharp spike in the USD/CNH revived emerging market concerns, thus causing a sense of risk aversion across main equity indexes, leading the Nikkei 225 into the red, with losses accelerating post lunch trading, currently down -1.20% ahead of the closing bell. The unrest in Ukraine was also referred as another reason strengthening the case for a risk-off environment in Asia. USD/JPY is fast approaching 101.40/50 - importer bids reported -,an area that has proven reliable ever since the level regained last Feb 5. From a broader perspective, the 103 - 100.80 range prevails. On the fundamental front, inflation numbers in the Tokyo area continues to pick up in Feb, while Jan's price levels nationwide were stable.
The New Zealand Dollar was one of the big winners in Asia along with the Yen, immune to the EM/China jitters as New Zealand continues to release very strong economic indicators. The last evidence came today, when we learnt that business confidence in the country stands at the highest level since 1994 after a monster jump in AZ Business Confidence for February, which came at 70.8 vs 64.1 last, while ANZ Activity Outlook for February saw a +58.5 vs 53.5 last.
Main headlines in Asia
New Zealand's building permits decline in January
Tokyo inflation up, nationwide prices stabilize
Japan January Retail Trade s.a (MoM) rises to 1.4% vs -1.2%
NZ business confidence highest since 1994
United Kingdom Gfk Consumer Confidence steadies at -7 in February
Aust Private Sector Credit 0.4% m/m vs 0.5% exp
USD/CNY nears limit-up area, AUD selling may ease
Yuan slides lower taking the Aussie with it