30 Jan 2014
Asia Recap: Kiwi sold as RBNZ holds fire
FXstreet.com (Bali) - The Australian Dollar traded on a soft tone in Asia, although the worst performance came from the Kiwi, after the RBNZ decided to hold rates unchanged at 2.5%. Meanwhile, the Japanese Yen traded heavy too, as traders took some profits off the table following the rampage of risk aversion from Wed European session.
After trying to break through 102.00 ahead of the FOMC announcement, the expected 10 bn tapper decision by the Fed allowed the exchange rate to come afloat, range-bounding for most of the Asian session, until Tokyo players took out 102.30/5 resistance in their post-lunch break. From there, the USD/JPY absorbed orders until faced with 102.50/55.
The Australian Dollar displayed a soft tone in response to a downward revision on the China HSBC PMI from Jan (final read 49.5 vs 49.6 exp), however, there was no impetus for follow through below the 0.8720/25 support, forcing a retreat in price towards 0.8740.
Hongbin Qu, Chief Economist, China & Co-Head of Asia Economic Research at HSBC, had the following to say about the Chinese data: "A soft start to China's manufacturing sectors in 2014, partly due to weaker new export orders and slower domestic business activities during January. Policy makers should pay attention to downside risks and pre-emptively fine-tune policy to steady the pace of growth if needed."
The New Zealand Dollar plummeted on disappointment that the RBNZ held its fire by not changing their benchmark interest rate. According to the CB: "While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years. In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon."
Trader should be reminded that some countries in Asia have officially started celebrations over the Chinese new year, with many others joining tomorrow. Festivities will continue throughout next week, which will affect trading volume significantly. Taiwan, South Korea and Malaysia started their holidays today, with China, Hong Kong, Singapore, Philippines, Indonesia closed from tomorrow.
Main headlines in Asia
RBNZ maintains interest rate at 2.5%; to hike rates 'soon'
RBNZ gave clear signal hike coming in March - Westpac
NZ's English:NZ should expect higher rates in the coming months
Australia HIA New Home Sales (MoM) down to -0.4% in December from 7.5%
China's HSBC PMI for Jan revised slightly lower
After trying to break through 102.00 ahead of the FOMC announcement, the expected 10 bn tapper decision by the Fed allowed the exchange rate to come afloat, range-bounding for most of the Asian session, until Tokyo players took out 102.30/5 resistance in their post-lunch break. From there, the USD/JPY absorbed orders until faced with 102.50/55.
The Australian Dollar displayed a soft tone in response to a downward revision on the China HSBC PMI from Jan (final read 49.5 vs 49.6 exp), however, there was no impetus for follow through below the 0.8720/25 support, forcing a retreat in price towards 0.8740.
Hongbin Qu, Chief Economist, China & Co-Head of Asia Economic Research at HSBC, had the following to say about the Chinese data: "A soft start to China's manufacturing sectors in 2014, partly due to weaker new export orders and slower domestic business activities during January. Policy makers should pay attention to downside risks and pre-emptively fine-tune policy to steady the pace of growth if needed."
The New Zealand Dollar plummeted on disappointment that the RBNZ held its fire by not changing their benchmark interest rate. According to the CB: "While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years. In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon."
Trader should be reminded that some countries in Asia have officially started celebrations over the Chinese new year, with many others joining tomorrow. Festivities will continue throughout next week, which will affect trading volume significantly. Taiwan, South Korea and Malaysia started their holidays today, with China, Hong Kong, Singapore, Philippines, Indonesia closed from tomorrow.
Main headlines in Asia
RBNZ maintains interest rate at 2.5%; to hike rates 'soon'
RBNZ gave clear signal hike coming in March - Westpac
NZ's English:NZ should expect higher rates in the coming months
Australia HIA New Home Sales (MoM) down to -0.4% in December from 7.5%
China's HSBC PMI for Jan revised slightly lower