20 Jan 2015
Asia Recap: China growth tops expectations, Yen & Pound sold
FXStreet (Bali) - The Japanese Yen and the British Pound were the worst performing currencies during Asian hours, with the US Dollar finding solid bids across the board, in a session with an upbeat Chinese growth report and IMF cutting global growth forecast dominated the headlines.
AUD/USD saw offers absorbing bids from the get go, with a test of 0.8170 intraday support met with strong buying interest, not so much on techs alone but on rumours being carried across several Chinese news agencies 10m ahead of the Chinese GDP that headline growth number y/y for Q4 would come between 7.3-7.4%, an outcome good enough to bid the Aussie up over 40 pips, topping out at 0.8215 just ahead of the official GDP data. Once the market learnt that growth in China stood at 7.3% y/y, with the news being discounted, we saw a retracement, briefly breaking through 0.8170 - lowest at 0.8161 - to trigger stops before price stabilized circa 0.8175.
USD/JPY exhibited the neatest bull picture, with strong demand allowing buyers to break through 118.00, gunning through stops, for a continuation towards 118.32, highest since Jan 13. The Nikkei rallied over 1.5%, regaining the psychological 17k, and fueling Yen sales on the correlation factor. Gotobi demand ahead of the Tokyo fix also assisted bulls. Focus in the Japanese market now shifts to the BoJ policy meeting later this week, with expectations of a downgrade in inflation forecasts running high.
GBP/USD was another big mover in Asia, adding to the losses printed during yesterday's slow NY session, registering a new low of 1.5056 as smart money flows completed a third impulsive push down in what may have been - now probably over - the market with the clearest directional bias at the start of the week. Meanwhile, EUR/USD had a retracement lower during Asia too, with 1.1550 the lowest, ahead of the German ZEW survey numbers.
Main headlines in Asia
New Zealand NZIER Business Confidence (QoQ): 23% (4Q) vs 19%
NZ economy continues to display Goldilocks characteristics - ANZ
Hilsenrath: Fed on track to raise short-term rates later this year
Syriza expands poll lead ahead of election
China GDP Q4 2014 ends at 7.3% y/y
China's GDP solid, but IP more important - ANZ
IMF cuts 2015 global growth forecast to 3.5% from 3.8%
ANZ cuts 2014/15 NZ milk price forecast
China stocks rebound on optimistic GDP data
BOJ to downgrade inflation forecast - Nomura
AUD/USD saw offers absorbing bids from the get go, with a test of 0.8170 intraday support met with strong buying interest, not so much on techs alone but on rumours being carried across several Chinese news agencies 10m ahead of the Chinese GDP that headline growth number y/y for Q4 would come between 7.3-7.4%, an outcome good enough to bid the Aussie up over 40 pips, topping out at 0.8215 just ahead of the official GDP data. Once the market learnt that growth in China stood at 7.3% y/y, with the news being discounted, we saw a retracement, briefly breaking through 0.8170 - lowest at 0.8161 - to trigger stops before price stabilized circa 0.8175.
USD/JPY exhibited the neatest bull picture, with strong demand allowing buyers to break through 118.00, gunning through stops, for a continuation towards 118.32, highest since Jan 13. The Nikkei rallied over 1.5%, regaining the psychological 17k, and fueling Yen sales on the correlation factor. Gotobi demand ahead of the Tokyo fix also assisted bulls. Focus in the Japanese market now shifts to the BoJ policy meeting later this week, with expectations of a downgrade in inflation forecasts running high.
GBP/USD was another big mover in Asia, adding to the losses printed during yesterday's slow NY session, registering a new low of 1.5056 as smart money flows completed a third impulsive push down in what may have been - now probably over - the market with the clearest directional bias at the start of the week. Meanwhile, EUR/USD had a retracement lower during Asia too, with 1.1550 the lowest, ahead of the German ZEW survey numbers.
Main headlines in Asia
New Zealand NZIER Business Confidence (QoQ): 23% (4Q) vs 19%
NZ economy continues to display Goldilocks characteristics - ANZ
Hilsenrath: Fed on track to raise short-term rates later this year
Syriza expands poll lead ahead of election
China GDP Q4 2014 ends at 7.3% y/y
China's GDP solid, but IP more important - ANZ
IMF cuts 2015 global growth forecast to 3.5% from 3.8%
ANZ cuts 2014/15 NZ milk price forecast
China stocks rebound on optimistic GDP data
BOJ to downgrade inflation forecast - Nomura