23 Jan 2014
Asia Recap: China HSBC PMI sends AUD back to $0.88
FXstreet.com (Bali) - The Australian and Canadian Dollar were the worst performing currencies in Asia, with the Yen outperforming its peers.
The Australian Dollar completed a 2-day round trip (V shape) after weak China HSBC/Markit manufacturing PMI came surprisingly low, leading to the loss of 0.8825/30 support in the AUD/USD, fueling selling momentum for a touch and break of 0.88. The lack of bounces does not bode well for the Aussie in the European trade. That being said, an important observation about the Chinese PMI data is the fact that the upcoming Chinese New Year period results in many factories closed early due to the Spring break.
The Canadian dollar losses were exacerbated in Asia, as barriers/stop loss orders went off in USD/CAD, with real money accounts forced to bail out, and market sources noting that readjustment in hedges should keep CAD attempts to pullback quite shallow. USD/CAD buy dips seems the way to go.
The Japanese Yen went 'bust and boom', first displaying weakness in early Tokyo, when mega-banks got busy bidding the USD/JPY above 104.50 achieving a rate of 104.80, but due to poor Chinese data, longs were caught on the wrong foot, triggering sales on AUD/JPY, leading the Yen crosses complex down, also in sympathy with the negative mood in the Nikkei 225, which saw a rotation lower from +0.75% back to its flat line for the day.
It is also worth noting that the SP500 and Dow Jones futures were unusually volatile in Asia, with declines in the tune of 0.4/0.5%. Euro, Pound, Kiwi and Franc Swiss provided little moves to report.
Main headlines in Asia
BNZ-Business New Zealand PMI at healthy levels
Will the RBA follow RBNZ steps on LVR restrictions?
BOC's Poloz: BOC has taken a more dovish stance
Odds of BoC rate cut at 30% in 6 months - Nomura
PBoC to inject liquidity, AUD positive
China HSBC PMI falls below 50.00, 6-month low
IMF deputy MD Shinohara: Japan should start planning for easing exit now
The Australian Dollar completed a 2-day round trip (V shape) after weak China HSBC/Markit manufacturing PMI came surprisingly low, leading to the loss of 0.8825/30 support in the AUD/USD, fueling selling momentum for a touch and break of 0.88. The lack of bounces does not bode well for the Aussie in the European trade. That being said, an important observation about the Chinese PMI data is the fact that the upcoming Chinese New Year period results in many factories closed early due to the Spring break.
The Canadian dollar losses were exacerbated in Asia, as barriers/stop loss orders went off in USD/CAD, with real money accounts forced to bail out, and market sources noting that readjustment in hedges should keep CAD attempts to pullback quite shallow. USD/CAD buy dips seems the way to go.
The Japanese Yen went 'bust and boom', first displaying weakness in early Tokyo, when mega-banks got busy bidding the USD/JPY above 104.50 achieving a rate of 104.80, but due to poor Chinese data, longs were caught on the wrong foot, triggering sales on AUD/JPY, leading the Yen crosses complex down, also in sympathy with the negative mood in the Nikkei 225, which saw a rotation lower from +0.75% back to its flat line for the day.
It is also worth noting that the SP500 and Dow Jones futures were unusually volatile in Asia, with declines in the tune of 0.4/0.5%. Euro, Pound, Kiwi and Franc Swiss provided little moves to report.
Main headlines in Asia
BNZ-Business New Zealand PMI at healthy levels
Will the RBA follow RBNZ steps on LVR restrictions?
BOC's Poloz: BOC has taken a more dovish stance
Odds of BoC rate cut at 30% in 6 months - Nomura
PBoC to inject liquidity, AUD positive
China HSBC PMI falls below 50.00, 6-month low
IMF deputy MD Shinohara: Japan should start planning for easing exit now