Aussie declines despite shrinking Australian trade deficit - Market Overview by FXNET

[FxNet]

The Asian session was calm as the economic calendar was light and most investors were positioning ahead of key risk events later this week, primarily the US nonfarm payrolls report on Friday.

Meanwhile, there was some recovery in the US dollar today following disappointing US data from late on Monday. The Institute for Supply Management said its services index dropped to 53% in December from 53.9% in November.

USDJPY opened in Asia at 104.22 after a volatile US session that brought the pair down to 103.90. The pair ended up at 104.42 with a 0.20% gain.

EURUSD opened Asia at 1.3628 and ended at 1.3617. Yesterday the euro was lifted by better - than -expected Eurozone sentiment data which contrasted with soft US ISM non-manufacturing data. A key driver today for the euro will be Eurozone CPI data.

The euro edged up against the yen, with EURJPY finishing at 142.18, rebounding from Monday’s low of 141.48 but far below a 5-year high of 145.65 set in December.

The aussie dollar fell despite news showing the Australian trade deficit was smaller- than-expected deficit in November. The Australian dollar eased down almost half a percent to 0.8919.

In other news, the US Senate confirmed Janet Yellen to be the next Chairperson of the Federal Reserve during a vote on Monday and will be replacing outgoing Ben Bernanke in February.

 

[FxNet]

Asian Session – Aussie gains after data shows Australian economy picks up pace

Risk trades were back after the Ukraine crisis de-escalated and this was particularly evident after the S&P 500 rallied 1.5% to a record high on Tuesday.

During Wednesday’s Asian session, the main data releases were from Australian, with fourth quarter GDP numbers coming in stronger-than-forecast.

In other news, China provided its strongest signal yet that it will shift toward balanced and clean economic growth, promising to reduce the pace of investment to the lowest in a decade and wage a "war on pollution".

Most major currencies traded a range during today’s Asian session, consolidating moves from the previous day. The unwinding safe haven trades led to a weaker yen and Swiss franc.

USDJPY opened the Asian session at 102.21 after the yen was sold across the board due to outflows from safe have currencies as the Ukraine crisis eased. The pair traded a 102.11/29 range throughout the Asian session.

EURJPY did little and traded a 140.25/57 range.

EURUSD opened the Asian session at 1.3742 but barely moved during the Asian session , edging down about 15 pips to 1.3727. Focus is on Euro zone services PMI data later today. The main key risk for the euro will be the European Central Bank meeting on Thursday. There are mixed views on whether the ECB will take action and cut rates.

GBPUSD traded sideways in Asia between 1.6656-73. UK BRC shop prices inflation data released early today had little impact. The UK services PMI data due later today will be more important while Thursday’s Bank of England policy meeting will also be a key risk for the pound.

USDCHF traded a 0.8868-08877 range, remaining calm after fears of the Ukraine crisis subsided and there was less demand for the safe haven Swissie.

AUDUSD opened on Wednesday at 0.8952 and the pair spiked up to 0.8995 after the better-than-expected Q4 GDP numbers. The pair then fell back down to 0.8935.

Looking ahead, Eurozone services PMI data will be released in the European session today.

 

[FxNet]

Asian Session – Yen gains on safe haven demand after dismal China trade data

Risk aversion took hold on Monday after a shockingly weak Chinese trade balance report sent a shiver through the markets on the weekend. The world’s second largest economy posted a $23 billion monthly deficit in February compared to a $14 billion surplus expected. This comes after a nearly $32 billion surplus in January.

Meanwhile other disappointing news hurt market sentiment as well after Japan's current account deficit hit a record 1.5tn yen in January.

Due to increased safe haven demand, the yen benefited during Monday’s Asian session.

USDJPY opened on Monday with a gap lower on risk aversion following worse than expected China trade data. The pair dipped from 103.11 to 102.96. On Friday the dollar surged to a high of 103.75 on the back of stronger-than-forecast US jobs numbers.

EURUSD is proving to be resilient despite the growing tensions in the Ukraine crisis. The pair moved off post-NFP lows of 1.3851 hit on Friday and opened the Asian session on Monday at 1.3870 to reach a session high of1.3891.

GBPUSD traded a 1.6720-45 range during the Asian session, down from Friday’s high of 1.6784.

USDCHF traded a 0.8759-0.8780 range. Swiss retail sales data will be in focus today.

AUDUSD opened the Asian session at 0.9045, gapping down from Friday’s New York close of 0.9069 and slid to 0.9022. The aussie is being weighed down by the poor China trade numbers. China is a major trading partner for Australia.

 

[FxNet]

Asian Session – Yen steady after Bank of Japan policy remains unchanged

The focus of the Asian markets on Tuesday was on the Bank of Japan policy meeting which concluded after two days. As was anticipated by many, the BOJ held its policy unchanged and left its overnight call rate at 0.1% and the monetary base target at Y60-70 tln.

The BOJ also left its economic assessment of the Japanese economy unchanged, noting that the moderate economic recovery is continuing. The BOJ said that although export growth has levelled off there has been a pick up in capital spending, and that industrial production has been increasing at a somewhat accelerated pace.

USDJPY eased back to a low near 103.15 following the BOJ decision. Earlier in the session it rose to a high above 103.40.

EURJPY slid after the BOJ but holds above 143.00 as it has been doing in Monday’s US session.

GBPUSD slid down to a low near 1.6630 stayed near its low after the release of the BRC like-for-like retail sales which came in at -1.0% y/y versus forecast of 1.6%.

AUDUSD initially slid down to a low of 0.9010 following the release of weak Australian data before ending the session little changed. The National Australia Bank (NAB) business conditions and confidence data) came in at 0 versus +5 previously and +7 versus +9 prior (respectively) . However, the pair remains on the defensive on uncertainty regarding the weak China data over the weekend and the geopolitical tensions between Russia & Ukraine.