29 Apr 2015
Aussie unwinds in Asia, US GDP Q1, FOMC to steal the show
FXStreet (Mumbai) - The Aussie was the biggest loser in Asia, dragged below 0.80 handle largely on profit-taking while NZD/USD also dipped after NZ business sentiment took a hit in April. USD/JPY trades around a flat line below 119 barrier awaiting fresh incentives with nervousness rising ahead of the FOMC meeting, which concludes later today.
Key headlines in Asia
AUD/USD drifts below 0.80 on profit-taking
Australia may be placed on a “negative outlook” by S&P - GS
NZ trade balance beats expectations in March
USD/JPY supported at 118.75
Dominating themes in Asia - centered on JPY, AUD, NZD
Limited data to report in Asia with Japan closed in n observance of Showa Day while Asian equities remained mostly mixed before key FOMC statement. While the US dollar rebounded this session, correcting heavy losses from last few sessions after the recent series of week US macro data dragged USD broadly lower.
The Antipodeans’ maintained an offered tone with the Aussie emerging the weakest as traders viewed the recent strength as excessive and resorted to square off their AUD longs ahead of the key FOMC event. NZD/USD also edged lower tracking losses in its OZ neighbor as downbeat NZ business sentiment numbers overshadowed better than forecasts NZ trade balance data.
USD/JPY hovers in a slim 10-pips range, holding the key support at 118.75 levels as markets remain divided ahead of FOMC statement later today and Bank of Japan’s (BOJ) monetary policy decision on Thursday.
Heading into Europe - centered on EUR, GBP
For EUR.GBP traders, the EUR calendar is pretty busy with German CPI to be widely watched along with other 2-tier data UK’s nation-wide HPI and EZ M3 money supply data.
German Prelim CPI for April is expected to show -0.1% on-month vs. +0.5% in March; and on yearly basis +0.4% in April vs. +0.3% in March last year. While Eurozone numbers: M3 for March, seen accelerating further to 4.3% y/y and 4.1% 3MMA
Later in the North American session, US Prelim GDP Q1 2015 and FOMC statement are likely to steal the limelight.
First quarter advance estimate GDP is expected to show annualized +1.0% growth vs. +2.2% expansion seen in the in fourth quarter. US GDP report is due to be released at 12.30GMT
While all eye will be set on FOMC decision due to published at 18GMT. The Fed is likely to downgrade the assessment of growth, but strike a more confident tone on the inflation outlook and drop any remnants of date-based guidance on the policy rate, with the FOMC entering a fully data-driven mode.
Chief US economist at Capital Economics Paul Ashworth notes. "A September lift-off is the marginal favorite, but June and July are possibilities, if it becomes clear quickly that the slowdown in Q1 was a temporary weather-related blip rather than something more serious."
Senior FX strategist at TD Securities believes, "US data has been mixed, suggesting the bounce back expected in Q2 might be slower than presumed, delaying expectations that the Fed will begin hiking sooner. September might be the date, but if the data continue to disappoint, it might be later than that."
Key headlines in Asia
AUD/USD drifts below 0.80 on profit-taking
Australia may be placed on a “negative outlook” by S&P - GS
NZ trade balance beats expectations in March
USD/JPY supported at 118.75
Dominating themes in Asia - centered on JPY, AUD, NZD
Limited data to report in Asia with Japan closed in n observance of Showa Day while Asian equities remained mostly mixed before key FOMC statement. While the US dollar rebounded this session, correcting heavy losses from last few sessions after the recent series of week US macro data dragged USD broadly lower.
The Antipodeans’ maintained an offered tone with the Aussie emerging the weakest as traders viewed the recent strength as excessive and resorted to square off their AUD longs ahead of the key FOMC event. NZD/USD also edged lower tracking losses in its OZ neighbor as downbeat NZ business sentiment numbers overshadowed better than forecasts NZ trade balance data.
USD/JPY hovers in a slim 10-pips range, holding the key support at 118.75 levels as markets remain divided ahead of FOMC statement later today and Bank of Japan’s (BOJ) monetary policy decision on Thursday.
Heading into Europe - centered on EUR, GBP
For EUR.GBP traders, the EUR calendar is pretty busy with German CPI to be widely watched along with other 2-tier data UK’s nation-wide HPI and EZ M3 money supply data.
German Prelim CPI for April is expected to show -0.1% on-month vs. +0.5% in March; and on yearly basis +0.4% in April vs. +0.3% in March last year. While Eurozone numbers: M3 for March, seen accelerating further to 4.3% y/y and 4.1% 3MMA
Later in the North American session, US Prelim GDP Q1 2015 and FOMC statement are likely to steal the limelight.
First quarter advance estimate GDP is expected to show annualized +1.0% growth vs. +2.2% expansion seen in the in fourth quarter. US GDP report is due to be released at 12.30GMT
While all eye will be set on FOMC decision due to published at 18GMT. The Fed is likely to downgrade the assessment of growth, but strike a more confident tone on the inflation outlook and drop any remnants of date-based guidance on the policy rate, with the FOMC entering a fully data-driven mode.
Chief US economist at Capital Economics Paul Ashworth notes. "A September lift-off is the marginal favorite, but June and July are possibilities, if it becomes clear quickly that the slowdown in Q1 was a temporary weather-related blip rather than something more serious."
Senior FX strategist at TD Securities believes, "US data has been mixed, suggesting the bounce back expected in Q2 might be slower than presumed, delaying expectations that the Fed will begin hiking sooner. September might be the date, but if the data continue to disappoint, it might be later than that."