29 Jan 2015
Asia Recap: RBNZ cuts Kiwi's wings, not yet rates...
FXStreet (Bali) - The New Zealand Dollar was the worst performing currency in Asia after a more dovish-than-expected RBNZ, while the US Dollar held firm to its gains after a relatively uneventful FOMC.
AUD/USD saw a late US sell-off worth 1 cent from post FOMC highs to lows, after the Fed didn't explicitly provide any reason to unload US Dollars, still sounding upbeat on the economy, while a bit more cautious on CPI estimates, although no signs were given about backing off from potential rate hikes later this year, a scenario which appears increasingly hard to conceive given the global easing trend by other Central Banks. The exchange rate posted its lowest at 0.7870.
USD/JPY traded on a bullish note from the get-go of Asia, with bulls returning in earnest off 117.30 post FOMC lows, sending the pair as high as 118.10 before retracing some 20/30 odd pips just under the round number. Talk in the street was that Japanese pension fund were actively reallocating assets out of domestic bonds and into local stocks, benefiting the Nikkei 225, and as a result, the Yen crosses.
NZD/USD depreciated over 1.5 cents from the highs to the lows once the FOMC and RBNZ risk events were out of the way, with an initial Fed-induced bounce well protected by 0.7470/80 offers before the RBNZ monetary policy meeting - held OCR at 3.5% - caused the Kiwi to collapse through key levels, including the 0.7330 - 38.2% fib retrac from the post GFC rally - with a virtually non-existent bounce in Asia capped by 0.7845/50. Imre Speizer, FX Strategist at Westpac, shared his thoughts on the RBNZ’s OCR Review, noting that "the RBNZ shifted from an explicit tightening bias to an explicit neutral bias with an allowance for rate cuts, which was a dovish market surprise."
Main headlines in Asia
RBNZ: Dovish market surprise - Westpac
Fed more dovish, normalization on track - ANZ
New Zealand Trade balance registers deficit of 159m in December
Japan Foreign bond investment up to ¥45.6B in January 23 from previous ¥-397.2B
Japan Foreign investment in Japan stocks climbed from previous ¥-577.4B to ¥466.9B in January 23
Australia CB Leading Indicator climbed from previous -0.2% to 0.1% in November
Japan Retail Trade s.a (MoM): -0.3% (December)
Japan Large Retailer's Sales fell from previous 1.2% to 0.1% in December
Japan Retail Trade (YoY) below expectations (0.9%) in December: Actual (0.2%)
MAS: Chances of further easing in April relatively low - Nomura
Australia Import Price Index (QoQ) up to 0.9% in 4Q from previous -0.8%
Australia Export Price Index (QoQ) climbed from previous -3.9% to 0% in 4Q
AUD/USD saw a late US sell-off worth 1 cent from post FOMC highs to lows, after the Fed didn't explicitly provide any reason to unload US Dollars, still sounding upbeat on the economy, while a bit more cautious on CPI estimates, although no signs were given about backing off from potential rate hikes later this year, a scenario which appears increasingly hard to conceive given the global easing trend by other Central Banks. The exchange rate posted its lowest at 0.7870.
USD/JPY traded on a bullish note from the get-go of Asia, with bulls returning in earnest off 117.30 post FOMC lows, sending the pair as high as 118.10 before retracing some 20/30 odd pips just under the round number. Talk in the street was that Japanese pension fund were actively reallocating assets out of domestic bonds and into local stocks, benefiting the Nikkei 225, and as a result, the Yen crosses.
NZD/USD depreciated over 1.5 cents from the highs to the lows once the FOMC and RBNZ risk events were out of the way, with an initial Fed-induced bounce well protected by 0.7470/80 offers before the RBNZ monetary policy meeting - held OCR at 3.5% - caused the Kiwi to collapse through key levels, including the 0.7330 - 38.2% fib retrac from the post GFC rally - with a virtually non-existent bounce in Asia capped by 0.7845/50. Imre Speizer, FX Strategist at Westpac, shared his thoughts on the RBNZ’s OCR Review, noting that "the RBNZ shifted from an explicit tightening bias to an explicit neutral bias with an allowance for rate cuts, which was a dovish market surprise."
Main headlines in Asia
RBNZ: Dovish market surprise - Westpac
Fed more dovish, normalization on track - ANZ
New Zealand Trade balance registers deficit of 159m in December
Japan Foreign bond investment up to ¥45.6B in January 23 from previous ¥-397.2B
Japan Foreign investment in Japan stocks climbed from previous ¥-577.4B to ¥466.9B in January 23
Australia CB Leading Indicator climbed from previous -0.2% to 0.1% in November
Japan Retail Trade s.a (MoM): -0.3% (December)
Japan Large Retailer's Sales fell from previous 1.2% to 0.1% in December
Japan Retail Trade (YoY) below expectations (0.9%) in December: Actual (0.2%)
MAS: Chances of further easing in April relatively low - Nomura
Australia Import Price Index (QoQ) up to 0.9% in 4Q from previous -0.8%
Australia Export Price Index (QoQ) climbed from previous -3.9% to 0% in 4Q