1 Dec 2014
Asia Recap: USD rules, AUD and Gold sold heavy
FXStreet (Bali) - A lively Asian session, with the US Dollar the big winner across the board, while commodity currencies AUD, NZD, CAD were crushed, together with Gold, Oil and iron ore.
AUD/USD took another harsh beating, with selling pressure 'on' right from the get go in early Sydney (interbank trade). The exchange rate printed its lowest at 0.8416, with a lower-than-expected official China PMI and an unchanged China HSBC PMI, barely influencing sentiment, as it always felt that the market would continue to sell regardless of the Chinese data outcomes. The sell-off in Gold coupled with broad-based USD strength exacerbated AUD's pain, with chatter of another RBA rate cut mounting, as downside risks to the Australian economy grow amid the collapse in key commodity assets such as iron ore, key export product to generate income and growth for the country. Ahead of Tuesday's RBA monetary policy meeting, the AUD/USD now consolidates around 0.8450, with the bearish momentum having receded somewhat.
USD/JPY exhibited bullish dynamics right from the start, in line with the broad-based USD strength theme, allowing the exchange rate to test offers circa 119.00, but failing to gather any momentum to materialize what would have been a key breakout to expose 120.00. Instead, some exporters' related selling, combined with presumed option barrier protection and leveraged accounts unloading longs amid multiple topside failures at the key round number, led to a modest pullback to 118.80. The Nikkei 225 was up over 1% on the day, with expectations of an upward revision to a horrendous Japanese Q3 GDP reading and solid Capex, buoying. While the upward pressure remains, the fact that USD/JPY is trading above the levels when Japanese FinMin Aso upped his rhetoric - Nov 25 - towards the undesirable pace of Yen depreciation, leveraged names/fast money might not have the same conviction to hold JPY shorts as risks of talking the Yen up by Japanese officials grow at current levels.
NZD/USD was also sold quite severely in the early going, with a speech by RBNZ Wheeler - talking down NZD as usual - weighing, although the recovery once the day low at 0.7777 was reached led to a more vigorous bounce than the Aussies, leading to a retest of 0.7820, with the break of 1.0820 range low in AUD/NZD, currently testing bids circa 1.08, injecting further buying interest into the Kiwi late in Asia. On the European currencies domain, EUR/USD traded as low as 1.2425 only to regain 1.2450. GBP/USD is playing with fire around 1.56, with the UK PMI the catalyst to either save shaky bulls from another disaster or see the bear trend resume. EUR/CHF saw a 20+ pips spike to 1.2039 after the Swiss Gold referendum got clearly rejected, main driver triggering massive sales in Gold, with price stabilizing around $1,150.00.
Key headlines
RBNZ's Wheeler: NZD rate unjustified and unsustainable
Recap of RBNZ Wheeler speech - BNZ
Switzerland: Gold referendum clearly rejected
EUR/CHF spike after “No” vote to be short-lived - Nomura
New Zealand Terms of Trade Index registered at -4.4% above expectations (-4.8%) in 3Q
Australia's manufacturing index for Nov back into expansion
Australia TD Securities Inflation (MoM) fell from previous 0.2% to 0.1% in November
Japan Capital Spending rose from previous 3% to 5.5% in 3Q
Australia Company Gross Operating Profits (QoQ) above forecasts (-1.2%) in 3Q: Actual (0.5%)
China NBS Manufacturing PMI below forecasts (50.6) in November: Actual (50.3)
Japan's Manufacturing PMI for Nov a tad lower
HSBC China PMI unchanged at 50.00, lowest since May
AUD/USD took another harsh beating, with selling pressure 'on' right from the get go in early Sydney (interbank trade). The exchange rate printed its lowest at 0.8416, with a lower-than-expected official China PMI and an unchanged China HSBC PMI, barely influencing sentiment, as it always felt that the market would continue to sell regardless of the Chinese data outcomes. The sell-off in Gold coupled with broad-based USD strength exacerbated AUD's pain, with chatter of another RBA rate cut mounting, as downside risks to the Australian economy grow amid the collapse in key commodity assets such as iron ore, key export product to generate income and growth for the country. Ahead of Tuesday's RBA monetary policy meeting, the AUD/USD now consolidates around 0.8450, with the bearish momentum having receded somewhat.
USD/JPY exhibited bullish dynamics right from the start, in line with the broad-based USD strength theme, allowing the exchange rate to test offers circa 119.00, but failing to gather any momentum to materialize what would have been a key breakout to expose 120.00. Instead, some exporters' related selling, combined with presumed option barrier protection and leveraged accounts unloading longs amid multiple topside failures at the key round number, led to a modest pullback to 118.80. The Nikkei 225 was up over 1% on the day, with expectations of an upward revision to a horrendous Japanese Q3 GDP reading and solid Capex, buoying. While the upward pressure remains, the fact that USD/JPY is trading above the levels when Japanese FinMin Aso upped his rhetoric - Nov 25 - towards the undesirable pace of Yen depreciation, leveraged names/fast money might not have the same conviction to hold JPY shorts as risks of talking the Yen up by Japanese officials grow at current levels.
NZD/USD was also sold quite severely in the early going, with a speech by RBNZ Wheeler - talking down NZD as usual - weighing, although the recovery once the day low at 0.7777 was reached led to a more vigorous bounce than the Aussies, leading to a retest of 0.7820, with the break of 1.0820 range low in AUD/NZD, currently testing bids circa 1.08, injecting further buying interest into the Kiwi late in Asia. On the European currencies domain, EUR/USD traded as low as 1.2425 only to regain 1.2450. GBP/USD is playing with fire around 1.56, with the UK PMI the catalyst to either save shaky bulls from another disaster or see the bear trend resume. EUR/CHF saw a 20+ pips spike to 1.2039 after the Swiss Gold referendum got clearly rejected, main driver triggering massive sales in Gold, with price stabilizing around $1,150.00.
Key headlines
RBNZ's Wheeler: NZD rate unjustified and unsustainable
Recap of RBNZ Wheeler speech - BNZ
Switzerland: Gold referendum clearly rejected
EUR/CHF spike after “No” vote to be short-lived - Nomura
New Zealand Terms of Trade Index registered at -4.4% above expectations (-4.8%) in 3Q
Australia's manufacturing index for Nov back into expansion
Australia TD Securities Inflation (MoM) fell from previous 0.2% to 0.1% in November
Japan Capital Spending rose from previous 3% to 5.5% in 3Q
Australia Company Gross Operating Profits (QoQ) above forecasts (-1.2%) in 3Q: Actual (0.5%)
China NBS Manufacturing PMI below forecasts (50.6) in November: Actual (50.3)
Japan's Manufacturing PMI for Nov a tad lower
HSBC China PMI unchanged at 50.00, lowest since May