24 Jul 2014
Asia Recap: RBNZ sends Kiwi down the elevator
FXStreet (Bali) - The Antipodean currencies were the main movers in Asia, with the Aussie continuing to shine, while the Kiwi was sold hard across the board.
NZD/USD fell over 1 cent after the RBNZ monetary policy decision; despite the OCR was increased again by 25bp to 3.5% (4th consecutive month), Governor Wheeler signaled a pause to the tightening cycle, while at the same time, took the opportunity to step up the rhetoric towards the NZD. Some market analysts were speculating that intervention by the RBNZ may occur now any day, although as long as it is kept below 0.87/0.88, that looks not that likely.
On rate expectations, the RBNZ noted: "It is prudent that there now be a period of assessment before interest rates adjust further towards a more-neutral level." As per the jawboning on the NZD, RBNZ said: "With the exchange rate yet to adjust to weakening commodity prices, the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall."
The AUD/USD kept finding further bids after an improved preliminary Chinese HSBC PMI, which came at 52.00 vs 51.1 last, marking the highest level in 18 months. The initial spike to 0.9470 on fresh buy flows quickly dried up though, leading the price to mark down seeking lower bids circa 0.9450-55, where the pair rests ahead of Europe.
Meanwhile, the rest of currencies, including the Japanese Yen, traded in a neutral tone. USD/JPY was stuck around the 101.50 still waiting for new macro-themes to develop. EUR/USD and GBP/USD remained near lows at 1.3460 and 1.7030 respectively, with the former facing EU PMIs ahead, while the latter sees UK retail sales published later today.
In other fundamental news, Japan trade balance for June came at Y -822.2 bn vs Y -642.9bn expected, while Japan's Markit/JMMA manufacturing PMI flash for July stood at 50.8 vs 51.5. In Australia, Moody’s said that Australian housing market is not yet overvalued. In New Zealand, trade balance came slightly better-than-expected.
Main headlines in Asia
RBNZ hikes rates, signals pause on tightening cycle
RBNZ: Strong language towards NZD main surprise - Westpac
NZ trade balance comes above expectations
Japan Merchandise Trade Balance Total below expectations (¥-642.9B) in June: Actual (¥-822.2B)
Japan Imports (YoY) meets expectations (8.4%) in June
Japan Exports (YoY) below expectations (1%) in June: Actual (-2%)
Australian housing market not yet overvalued - Moody's
Resumption of RBNZ tightening cycle in Dec - BNZ
Japan Nomura/ JMMA Manufacturing Purchasing Manager Index declined to 50.8 in July from previous 51.1
China HSBC PMI soars to 18-month high
NZD at risk of intervention any day - Westpac
NZD/USD fell over 1 cent after the RBNZ monetary policy decision; despite the OCR was increased again by 25bp to 3.5% (4th consecutive month), Governor Wheeler signaled a pause to the tightening cycle, while at the same time, took the opportunity to step up the rhetoric towards the NZD. Some market analysts were speculating that intervention by the RBNZ may occur now any day, although as long as it is kept below 0.87/0.88, that looks not that likely.
On rate expectations, the RBNZ noted: "It is prudent that there now be a period of assessment before interest rates adjust further towards a more-neutral level." As per the jawboning on the NZD, RBNZ said: "With the exchange rate yet to adjust to weakening commodity prices, the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall."
The AUD/USD kept finding further bids after an improved preliminary Chinese HSBC PMI, which came at 52.00 vs 51.1 last, marking the highest level in 18 months. The initial spike to 0.9470 on fresh buy flows quickly dried up though, leading the price to mark down seeking lower bids circa 0.9450-55, where the pair rests ahead of Europe.
Meanwhile, the rest of currencies, including the Japanese Yen, traded in a neutral tone. USD/JPY was stuck around the 101.50 still waiting for new macro-themes to develop. EUR/USD and GBP/USD remained near lows at 1.3460 and 1.7030 respectively, with the former facing EU PMIs ahead, while the latter sees UK retail sales published later today.
In other fundamental news, Japan trade balance for June came at Y -822.2 bn vs Y -642.9bn expected, while Japan's Markit/JMMA manufacturing PMI flash for July stood at 50.8 vs 51.5. In Australia, Moody’s said that Australian housing market is not yet overvalued. In New Zealand, trade balance came slightly better-than-expected.
Main headlines in Asia
RBNZ hikes rates, signals pause on tightening cycle
RBNZ: Strong language towards NZD main surprise - Westpac
NZ trade balance comes above expectations
Japan Merchandise Trade Balance Total below expectations (¥-642.9B) in June: Actual (¥-822.2B)
Japan Imports (YoY) meets expectations (8.4%) in June
Japan Exports (YoY) below expectations (1%) in June: Actual (-2%)
Australian housing market not yet overvalued - Moody's
Resumption of RBNZ tightening cycle in Dec - BNZ
Japan Nomura/ JMMA Manufacturing Purchasing Manager Index declined to 50.8 in July from previous 51.1
China HSBC PMI soars to 18-month high
NZD at risk of intervention any day - Westpac