20 Mar 2015
What's next: Fed speakers, Canadian CPI/retail sales eyed
FXStreet (Bali) - The Australian Dollar was the best performing currency in Asia, with the US Dollar ending as the main laggard, with moves mainly related to short term speculative scalping interest and position squaring ahead of the weekend.
Main headlines in Asia
Fed's Evans makes case for rates to remain at zero until 2016
BOJ minutes: Will continue to ease until 2% inflation is stable
RBA Stevens: Firms and households less optimistic, struggling with miming boom transition
Dominating themes in Asia - centered on JPY, AUD, NZD
AUD/USD managed to find timid dip buyers in Tokyo, which together with some pre-weekend profit taking, allowed the pair to reclaim intraday horizontal line at 0.7665, now acting as support, despite the Aussie remains vulnerable to further slides, as indicated by the latest increase in specs short interest last week.
Today's speech by Reserve Bank of Australia Governor Stevens, in front of the American Chamber of Commerce in Australia, was a non-event, with Stevens noting that the transition from the mining boom is not as seamless as he would like, while adding that business and consumer confidence are getting less optimistic. Stevens also said that the depreciation in the Australian Dollar is supportive for the economy, together with the pick up in growth by the United States and depressed oil prices.
The Japanese Yen traded net slightly negative against its main peers for the session, only managing to eke out some minor gains against the US Dollar. The rate between the American and the Japanese currencies rotated in a very slim range, with the level last at 120.70 vs 120.76 close in NY. The Nikkei 225 traded marginally negative at -0.06% heading into the close.
BOJ Kuroda crossed the wires, but the Yen saw no reaction, as the policy-maker reiterated old news, noting that Japan CPI is likely to reach 2% in or around FY2015, adding that "if there is a risk of deflation, policy authorities should make every effort to prevent the economy from falling into it", and that "under QQE, the deflationary mindset is steadily being dispelled."
NZD/USD saw little moves, trading slightly higher at 0.7430 vs 0.7405 NY close. On the fundamental domain, NZ credit card spending for February declined by -0.1%, while the ANZ consumer confidence index for the month of March came in at +0.5% MoM to 124.6 vs -3.8% last, with ANZ noting "a positive sign for a sustainable trend in retail spending."
It is worth noting the downbeat research note published today by Paul Dales, Chief Australia & New Zealand Economist at Capital Economics, who said "2014 will be as good as it gets for New Zealand", expecting "a delayed hit from the fall in dairy prices and the temporary effects of the drought that will contribute to a slowdown in growth this year to around 2.3%", Dales wrote.
Heading into Europe/US
In Europe, the calendar is very quite, with only the European current account balance due at 9 GMT. In the US and Canada, the flow of data and headlines will pick up, as two FOMC speakers - voters - are due to speak on monetary policy. In Canada, key inflation and retail sales data are due at 12.30 GMT. The Bank of Canada readjusted its policy to neutral this month, but with depressed oil prices, any renewed hiccups data-wise would add pressure to the Bank of Canada (BoC) to ease further.
View from Brian Daingerfield, FX Trading Strategist at RBS
"We see Lockhart, who is closer to the “middleground” FOMC member, as a notable FOMC speaker to watch for signs of a broader shift in FOMC sentiment. Lockhart has consistently signaled confidence with a rate hike at mid2015 or later – Lockhart showing lower confidence in a mid-2015 may be a sign that the middleground is less confident in the chances of a June rate hike.Meanwhile, Chicago Fed’s Evans has been consistently one of the Fed’s most dovish voices and will likely maintain a dovish tone in his commentary."
Looking at the EUR/USD from a technical perspective, Valeria Bedanrik, Chief Analyst at FXStreet, in her Asian open report, wrote that the pair looks ready to resume its downside, noting "immediate support standing at 1.0590, with a break below it most likely favoring a downward continuation towards 1.0550, the next strong static support level", Valeria said.
Main headlines in Asia
Fed's Evans makes case for rates to remain at zero until 2016
BOJ minutes: Will continue to ease until 2% inflation is stable
RBA Stevens: Firms and households less optimistic, struggling with miming boom transition
Dominating themes in Asia - centered on JPY, AUD, NZD
AUD/USD managed to find timid dip buyers in Tokyo, which together with some pre-weekend profit taking, allowed the pair to reclaim intraday horizontal line at 0.7665, now acting as support, despite the Aussie remains vulnerable to further slides, as indicated by the latest increase in specs short interest last week.
Today's speech by Reserve Bank of Australia Governor Stevens, in front of the American Chamber of Commerce in Australia, was a non-event, with Stevens noting that the transition from the mining boom is not as seamless as he would like, while adding that business and consumer confidence are getting less optimistic. Stevens also said that the depreciation in the Australian Dollar is supportive for the economy, together with the pick up in growth by the United States and depressed oil prices.
The Japanese Yen traded net slightly negative against its main peers for the session, only managing to eke out some minor gains against the US Dollar. The rate between the American and the Japanese currencies rotated in a very slim range, with the level last at 120.70 vs 120.76 close in NY. The Nikkei 225 traded marginally negative at -0.06% heading into the close.
BOJ Kuroda crossed the wires, but the Yen saw no reaction, as the policy-maker reiterated old news, noting that Japan CPI is likely to reach 2% in or around FY2015, adding that "if there is a risk of deflation, policy authorities should make every effort to prevent the economy from falling into it", and that "under QQE, the deflationary mindset is steadily being dispelled."
NZD/USD saw little moves, trading slightly higher at 0.7430 vs 0.7405 NY close. On the fundamental domain, NZ credit card spending for February declined by -0.1%, while the ANZ consumer confidence index for the month of March came in at +0.5% MoM to 124.6 vs -3.8% last, with ANZ noting "a positive sign for a sustainable trend in retail spending."
It is worth noting the downbeat research note published today by Paul Dales, Chief Australia & New Zealand Economist at Capital Economics, who said "2014 will be as good as it gets for New Zealand", expecting "a delayed hit from the fall in dairy prices and the temporary effects of the drought that will contribute to a slowdown in growth this year to around 2.3%", Dales wrote.
Heading into Europe/US
In Europe, the calendar is very quite, with only the European current account balance due at 9 GMT. In the US and Canada, the flow of data and headlines will pick up, as two FOMC speakers - voters - are due to speak on monetary policy. In Canada, key inflation and retail sales data are due at 12.30 GMT. The Bank of Canada readjusted its policy to neutral this month, but with depressed oil prices, any renewed hiccups data-wise would add pressure to the Bank of Canada (BoC) to ease further.
View from Brian Daingerfield, FX Trading Strategist at RBS
"We see Lockhart, who is closer to the “middleground” FOMC member, as a notable FOMC speaker to watch for signs of a broader shift in FOMC sentiment. Lockhart has consistently signaled confidence with a rate hike at mid2015 or later – Lockhart showing lower confidence in a mid-2015 may be a sign that the middleground is less confident in the chances of a June rate hike.Meanwhile, Chicago Fed’s Evans has been consistently one of the Fed’s most dovish voices and will likely maintain a dovish tone in his commentary."
Looking at the EUR/USD from a technical perspective, Valeria Bedanrik, Chief Analyst at FXStreet, in her Asian open report, wrote that the pair looks ready to resume its downside, noting "immediate support standing at 1.0590, with a break below it most likely favoring a downward continuation towards 1.0550, the next strong static support level", Valeria said.