10 Apr 2014
Asia Recap: AUD likes Aus jobs, dislikes China trade
FXStreet (Bali) - AUD was the big mover in Asia, after volatility kicked in following an upbeat jobs report but weak Chinese trade data.
AUD/USD opened at 0.9387 on the back of a dovish FOMC minutes, which acted as yet another setback for USD bulls. After an early shallow dip, the pair saw bids reinstated at the get-go in Tokyo, retesting 0.94 before retracing minutes ahead of the jobs data in Australia.
The spike that followed came in response to a much better-than-expected jobs headline at 18.1k vs 5k (4x positive divergence) and took us all the way to 0.9440 (weekly ichimoku cloud).
On closer examination though, the data was not as bright as initially though, as despite the drop in the unemployment rate to 5.8% vs 6% expected, the participation rate had decreased, but worse of all, 22.1k full-time jobs were lost.
Once Aus jobs was out of the way, the Chinese trade data was published, posting a terrible 11.3% decline in imports (March), a negative input for the Aussie which saw the rate retrace until stabilizing at the old resistance turned support 0.94.
with regards to USD/JPY, another topside failure at 102.10 kept the pressure to the downside, snapping the rate back down towards 101.75 session low. The Nikkei 225, which gave up some early gains to end flat for the day, played a limited role in today's price action.
The next technical focus on USD/JPY should be an ascending trendline coming off Feb 2 swing low ahead of further levels of support at 101.20/20 and 100.80. On the fundamental front, Japanese machinery orders fell way below expectations but as usual, the response by the Yen to the data was non-existent.
NZD/USD hit a new 30-month high at 0.8745 before pulling back to consolidate at 0.87/0.8710, area of strong support now. Fundamentally, the NZD remains well underpinned by the RBNZ tightening cycle, which is expected to raise rates as high as 5 to 5.5% in the next 2 year. Additionally, today we saw that NZ business PMI came at its highest since July 2013, providing more evidence over the strong economic conditions in the country.
Arguing against such as hawkish view though, Anne Boniface from Westpac makes a valid point, saying that the recent "decline in milk prices and the high dollar were clearly a combination that will tend to reduce inflation pressure and if sustained could mean fewer rate (OCR) rises would be required over the next two of years."
Main headlines in Asia
Fed concerned about misleading market on interest rates - WSJ Hilsenrath
New Zealand Business PMI: Highest since July 2013
Fed's Tarullo: When time for rate hikes come, Fed can do so gradually
Australian jobs upbeat, jobless rate drops unexpectedly
AUD/USD gives back some gains post China trade
AUD/USD opened at 0.9387 on the back of a dovish FOMC minutes, which acted as yet another setback for USD bulls. After an early shallow dip, the pair saw bids reinstated at the get-go in Tokyo, retesting 0.94 before retracing minutes ahead of the jobs data in Australia.
The spike that followed came in response to a much better-than-expected jobs headline at 18.1k vs 5k (4x positive divergence) and took us all the way to 0.9440 (weekly ichimoku cloud).
On closer examination though, the data was not as bright as initially though, as despite the drop in the unemployment rate to 5.8% vs 6% expected, the participation rate had decreased, but worse of all, 22.1k full-time jobs were lost.
Once Aus jobs was out of the way, the Chinese trade data was published, posting a terrible 11.3% decline in imports (March), a negative input for the Aussie which saw the rate retrace until stabilizing at the old resistance turned support 0.94.
with regards to USD/JPY, another topside failure at 102.10 kept the pressure to the downside, snapping the rate back down towards 101.75 session low. The Nikkei 225, which gave up some early gains to end flat for the day, played a limited role in today's price action.
The next technical focus on USD/JPY should be an ascending trendline coming off Feb 2 swing low ahead of further levels of support at 101.20/20 and 100.80. On the fundamental front, Japanese machinery orders fell way below expectations but as usual, the response by the Yen to the data was non-existent.
NZD/USD hit a new 30-month high at 0.8745 before pulling back to consolidate at 0.87/0.8710, area of strong support now. Fundamentally, the NZD remains well underpinned by the RBNZ tightening cycle, which is expected to raise rates as high as 5 to 5.5% in the next 2 year. Additionally, today we saw that NZ business PMI came at its highest since July 2013, providing more evidence over the strong economic conditions in the country.
Arguing against such as hawkish view though, Anne Boniface from Westpac makes a valid point, saying that the recent "decline in milk prices and the high dollar were clearly a combination that will tend to reduce inflation pressure and if sustained could mean fewer rate (OCR) rises would be required over the next two of years."
Main headlines in Asia
Fed concerned about misleading market on interest rates - WSJ Hilsenrath
New Zealand Business PMI: Highest since July 2013
Fed's Tarullo: When time for rate hikes come, Fed can do so gradually
Australian jobs upbeat, jobless rate drops unexpectedly
AUD/USD gives back some gains post China trade