7 Apr 2015
RBA holds interest rate, EZ/UK PMIs feast next
FXStreet (Bali) - The Australian Dollar was the strongest currency in Asia, following the decision by the RBA to leave rates unchanged.
Main headlines in Asia
Australia ANZ job ads: First month of contraction since mid last year
Australian retail sales beats expectations in February
RBA holds cash rate steady at 2.25%
Themes dominating Asia
AUD/USD traded under pressure during the early stages of the Asian session, with the bear momentum from late US hours extending into marginal new lows at 0.7580 before a bounce towards 0.7620 on better-than-expected Aus retail sales, coming at 0.7% vs 0.4% exp. After that, it was time for the RBA policy decision, which surprised the market by keeping rates on hold at 2.25%, resulting in the AUD/USD to test the 0.77 handle. The RBA, however, noted that "further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target; the Board will continue to assess the case for such action at forthcoming meetings."
USD/JPY was bracketed in a slim range between 119.40-60, with little interest to see a resolution either side. The pair has recovered most of last Friday's US NFP-induced losses. The last COT report continues to suggest that this market should remain range-bound without an clear bias as potions continue to unwind.
Heading into Europe
In the upcoming European session, the calendar is packed with Euro zone (revisions to preliminary March data) and UK PMIs.
Brian Daingerfield, FX Strategist at RBS, said: "In the UK, our economists expect to see a modest pickup in services activity, consistent with both the improvement in EU services sector PMIs, where the preliminary reading showed a jump from 53.7 to 54.3, and the modest rise in the March manufacturing PMI."
Swiss FX reserves and sight deposits will also be a key piece of data to follow during European hours. Mr. Daingerfield notes that "it will give the latest indication of whether the SNB has picked up intervention activity." The RBS Strategist adds that "the latest sight deposit data showed little sign of intervention, but with EUR/CHF having edged lower over the past month, the willingness of the SNB to actively intervene may have increased."
Main headlines in Asia
Australia ANZ job ads: First month of contraction since mid last year
Australian retail sales beats expectations in February
RBA holds cash rate steady at 2.25%
Themes dominating Asia
AUD/USD traded under pressure during the early stages of the Asian session, with the bear momentum from late US hours extending into marginal new lows at 0.7580 before a bounce towards 0.7620 on better-than-expected Aus retail sales, coming at 0.7% vs 0.4% exp. After that, it was time for the RBA policy decision, which surprised the market by keeping rates on hold at 2.25%, resulting in the AUD/USD to test the 0.77 handle. The RBA, however, noted that "further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target; the Board will continue to assess the case for such action at forthcoming meetings."
USD/JPY was bracketed in a slim range between 119.40-60, with little interest to see a resolution either side. The pair has recovered most of last Friday's US NFP-induced losses. The last COT report continues to suggest that this market should remain range-bound without an clear bias as potions continue to unwind.
Heading into Europe
In the upcoming European session, the calendar is packed with Euro zone (revisions to preliminary March data) and UK PMIs.
Brian Daingerfield, FX Strategist at RBS, said: "In the UK, our economists expect to see a modest pickup in services activity, consistent with both the improvement in EU services sector PMIs, where the preliminary reading showed a jump from 53.7 to 54.3, and the modest rise in the March manufacturing PMI."
Swiss FX reserves and sight deposits will also be a key piece of data to follow during European hours. Mr. Daingerfield notes that "it will give the latest indication of whether the SNB has picked up intervention activity." The RBS Strategist adds that "the latest sight deposit data showed little sign of intervention, but with EUR/CHF having edged lower over the past month, the willingness of the SNB to actively intervene may have increased."