6 Mar 2015
Asia Recap: USD squaring ahead of US Non-Farm Payrolls
FXStreet (Bali) - The US Dollar traded lower in Asia hours, with traders withdrawing liquidity from the market ahead of the US NFP.
The Aussie was the main beneficiary, and after seeing a late US low at 0.7755, a bottom edge exhaustion led to a rebound that picked up momentum along Asian hours amid little sell-side opposition. The pair eventually managed to get a short squeeze through 0.78, posting a session highs of 0.7812, with the next target at 0.7820/25 eyed.
NZD/USD bounced off 0.7455 lows, resulting in a retest of 0.75 offers, where two-way money was seen trading, with sellers so far holding the level. Overnight, Citi reported that the turnover on Thursday was over four times recent average.
USD/JPY saw an important withdrawal of liquidity around the Tokyo fix at 00.50 GMT, with the rate clearly rejecting 120.25/30 highs in the last US session, with Asian price action mostly bearish, breaking through 120.00, but no follow through was seen. USD/JPY showed little correlation with the Japanese benchmark Nikkei 225 today though, up by over 1% while Yen strengthened on short liquidation.
On the fundamental front, The Fed published its stress test results, which showed all 31 banks participating exceeding minimum capital requirements, with Morgan Stanley, Citi, BofA and Wells Fargo the most exposed to severe losses should an adverse scenario take place.
In Australia, the performance of construction index for February came at 43.9 vs 45.9, a fourth consecutive month of contraction. According to AiG, "falls in activity, employment and deliveries from suppliers continued in February, albeit at broadly unchanged rates. New orders contracted at a steeper rate."
Focus is now on the US NFP report, with market estimates calling for another set of strong data. According to Kathy Lien, Founder at BK Asset Management, "the U.S. dollar traded higher against all of the major currencies ahead of Friday's non-farm payrolls report. Kathy adds that "this price action suggests that investors are looking for a strong jobs number to reinforce their view that the Federal Reserve will raise interest rates in June."
The Aussie was the main beneficiary, and after seeing a late US low at 0.7755, a bottom edge exhaustion led to a rebound that picked up momentum along Asian hours amid little sell-side opposition. The pair eventually managed to get a short squeeze through 0.78, posting a session highs of 0.7812, with the next target at 0.7820/25 eyed.
NZD/USD bounced off 0.7455 lows, resulting in a retest of 0.75 offers, where two-way money was seen trading, with sellers so far holding the level. Overnight, Citi reported that the turnover on Thursday was over four times recent average.
USD/JPY saw an important withdrawal of liquidity around the Tokyo fix at 00.50 GMT, with the rate clearly rejecting 120.25/30 highs in the last US session, with Asian price action mostly bearish, breaking through 120.00, but no follow through was seen. USD/JPY showed little correlation with the Japanese benchmark Nikkei 225 today though, up by over 1% while Yen strengthened on short liquidation.
On the fundamental front, The Fed published its stress test results, which showed all 31 banks participating exceeding minimum capital requirements, with Morgan Stanley, Citi, BofA and Wells Fargo the most exposed to severe losses should an adverse scenario take place.
In Australia, the performance of construction index for February came at 43.9 vs 45.9, a fourth consecutive month of contraction. According to AiG, "falls in activity, employment and deliveries from suppliers continued in February, albeit at broadly unchanged rates. New orders contracted at a steeper rate."
Focus is now on the US NFP report, with market estimates calling for another set of strong data. According to Kathy Lien, Founder at BK Asset Management, "the U.S. dollar traded higher against all of the major currencies ahead of Friday's non-farm payrolls report. Kathy adds that "this price action suggests that investors are looking for a strong jobs number to reinforce their view that the Federal Reserve will raise interest rates in June."