2 Dec 2014
Asia Recap: Leg up in Aussie as RBA sticks to neutral rhetoric
FXStreet (Bali) - The Australian Dollar was kept in a relatively tight range ahead of the RBA, which showed, yet again, a subtle language, allowing the Antipodean currency to regain the 0.85 handle, with the rest of G10 FX space sedated.
There was nothing in the RBA policy statement to get AUD bears excited, with the Central Bank reiterating that 'the most prudent course of action is a period of stability in rates'. Since the market got somewhat ahead of itself on recent dovish calls given global disinflation, commodity price declines and further macro-prudential measures set to be introduced in Australia, the intraday rally in the AUD was a way of expressing failure by the RBA to meet market expectations. While AUD/USD may see a run towards 8550/60, traders should be reminded that there is $2.5 bln in option expiries at 0.85 later today, potentially acting as a magnet.
USD/JPY traded unusually quiet in Tokyo following a downgrade to Japan by Moody's earlier on Monday, with a mix of exporters supply and leveraged names trying to break higher ending in an 'even' battle as pricing stays barely changed from its NY close around 118.40, having recovered from a 117.85 low on Monday, with the sell-off in US equities, demand for Treasuries weighed on the USD appeal. With respect to the NZD, the currency saw a modest push higher, last at 0.7880, ahead of the key Fonterra GDT auction later in NY morning hours, main driver for the Kiwi today. EUR/USD and GBP/USD were both buffeted in slim ranges, last at 1.2465 and 1.5730.
Key headlines
RBA keeps rate at 2.5%, retains neutral stance
Japan Labor Cash Earnings (YoY) below forecasts (0.8%) in October: Actual (0.5%)
Australia Building Permits (YoY) climbed from previous -13.4% to 2.5% in October
Australia Current Account Balance came in at -12.5B, above expectations (-13.6B) in 3Q
Australia Building Permits (MoM) came in at 11.4%, above forecasts (5%) in October
ANZ Commodity Price Index falls for 9th straight month in Nov
Japan Monetary Base (YoY) declined to 36.7% in November from previous 36.9%
Change of call: RBA to cut rates by 50bps in 2015 - DB
Japan: Rating cut unlikely to change JPY trend - Nomura
There was nothing in the RBA policy statement to get AUD bears excited, with the Central Bank reiterating that 'the most prudent course of action is a period of stability in rates'. Since the market got somewhat ahead of itself on recent dovish calls given global disinflation, commodity price declines and further macro-prudential measures set to be introduced in Australia, the intraday rally in the AUD was a way of expressing failure by the RBA to meet market expectations. While AUD/USD may see a run towards 8550/60, traders should be reminded that there is $2.5 bln in option expiries at 0.85 later today, potentially acting as a magnet.
USD/JPY traded unusually quiet in Tokyo following a downgrade to Japan by Moody's earlier on Monday, with a mix of exporters supply and leveraged names trying to break higher ending in an 'even' battle as pricing stays barely changed from its NY close around 118.40, having recovered from a 117.85 low on Monday, with the sell-off in US equities, demand for Treasuries weighed on the USD appeal. With respect to the NZD, the currency saw a modest push higher, last at 0.7880, ahead of the key Fonterra GDT auction later in NY morning hours, main driver for the Kiwi today. EUR/USD and GBP/USD were both buffeted in slim ranges, last at 1.2465 and 1.5730.
Key headlines
RBA keeps rate at 2.5%, retains neutral stance
Japan Labor Cash Earnings (YoY) below forecasts (0.8%) in October: Actual (0.5%)
Australia Building Permits (YoY) climbed from previous -13.4% to 2.5% in October
Australia Current Account Balance came in at -12.5B, above expectations (-13.6B) in 3Q
Australia Building Permits (MoM) came in at 11.4%, above forecasts (5%) in October
ANZ Commodity Price Index falls for 9th straight month in Nov
Japan Monetary Base (YoY) declined to 36.7% in November from previous 36.9%
Change of call: RBA to cut rates by 50bps in 2015 - DB
Japan: Rating cut unlikely to change JPY trend - Nomura