8 Dec 2014
Asia Recap: Antipodean currencies in free-fall
FXStreet (Bali) - The Antipodean currencies were the worst performers in Asia, with the Kiwi registering the most losses after breaking into a new 2 1/2 year low, while the USD remained in solid demand on the back of an upbeat US NFP last Friday, which only reinforces the dominant bull trend in the world's reserve currency.
AUD/USD lost the 0.83 handle, printing its lowest at 0.8275, with pressure coming in since early Asian interbank trade, following the release of the Murray report in Australia, a negative input for the currency as market chatter over the RBA cutting rates early next year mounts. The Murray inquiry recommends Australian banks to hold more capita, but lifting Tier 1 Capital, should regulators in Australia approve it, would likely create upward pressure in lending rates, suggesting that the RBA may have greater room for maneuver on lower rates if needed. Later on the session, a collapse in China's imports for Nov exacerbated AUD's pain.
USD/JPY held above the 121.50, with a new high printed very early in Asia at 121.82 before retracing seeking liquidity, although the release of Japan's final Q3 GDP, down 0.5% vs 0.4% preliminary, saw any chance of Yen's correction expanding evaporate, with the pair having another go to the upside, with no much follow through noted, resulting in a consolidation along the 121.50 level ahead of Europe.
NZD/USD was the main laggard in Asia, breaking below Nov 7 low to reach a new 2 1/2 year low at 0.7643, with 0.7670/90 now expected to be filled with a solid cluster of offers as the breakout opens some juicy downside potential until 0.75/7550. It is worth reminding that for this week, NZD traders will face tow key event risks. Firstly, a more than likely 2015 milk payout downgrade by Fonterra, while Thursday's RBNZ may step up the overvaluation rhetoric towards the NZD.
Key headlines
New Zealand Manufacturing sales rose from previous -0.7% to 0.4% in 3Q
Murray report recommends Australian banks hold more capital
BIS warns on perils of strong USD to emerging economies
Japan's final Q3 GDP comes worse-than-expected
Australia ANZ Job Advertisements rise for sixth straight week
China trade balance: Imports collapse
Nikkei hits 18k mark, highest since 2007
AUD/USD lost the 0.83 handle, printing its lowest at 0.8275, with pressure coming in since early Asian interbank trade, following the release of the Murray report in Australia, a negative input for the currency as market chatter over the RBA cutting rates early next year mounts. The Murray inquiry recommends Australian banks to hold more capita, but lifting Tier 1 Capital, should regulators in Australia approve it, would likely create upward pressure in lending rates, suggesting that the RBA may have greater room for maneuver on lower rates if needed. Later on the session, a collapse in China's imports for Nov exacerbated AUD's pain.
USD/JPY held above the 121.50, with a new high printed very early in Asia at 121.82 before retracing seeking liquidity, although the release of Japan's final Q3 GDP, down 0.5% vs 0.4% preliminary, saw any chance of Yen's correction expanding evaporate, with the pair having another go to the upside, with no much follow through noted, resulting in a consolidation along the 121.50 level ahead of Europe.
NZD/USD was the main laggard in Asia, breaking below Nov 7 low to reach a new 2 1/2 year low at 0.7643, with 0.7670/90 now expected to be filled with a solid cluster of offers as the breakout opens some juicy downside potential until 0.75/7550. It is worth reminding that for this week, NZD traders will face tow key event risks. Firstly, a more than likely 2015 milk payout downgrade by Fonterra, while Thursday's RBNZ may step up the overvaluation rhetoric towards the NZD.
Key headlines
New Zealand Manufacturing sales rose from previous -0.7% to 0.4% in 3Q
Murray report recommends Australian banks hold more capital
BIS warns on perils of strong USD to emerging economies
Japan's final Q3 GDP comes worse-than-expected
Australia ANZ Job Advertisements rise for sixth straight week
China trade balance: Imports collapse
Nikkei hits 18k mark, highest since 2007