Forex news for Asia trading Thursday 15 December 2016
ICYMI: Fed hikes, hawkish dots imply 3 hikes in 2017 ... links etc. here
- China installs weapons systems on artificial islands - U.S. think tank
- UBS see 'Limits to the dollar rally' despite the hawkish dots
- Australian employment report - analyst responses
- Japan PM adviser: Weak yen positive for Japan's economy
- "State owned banks in China seen selling USD in onshore FX market"
- China November FDI +3.9% y/y (yuan terms)
- Brexit - Lego to raise its prices in UK from January
- EUR/USD option expiries today & tomorrow (biggies at 1.05)
- China's Central Economic Work Conference is currently taking place in Beijing
- The Federal Reserve is making changes to its Beige Book
- PBOC sets USD/CNY central rate at 6.9289 (vs. yesterday at 6.9028)
- Japan - Nikkei Manufacturing PMI (Dec., flash): (prior 51.3)
- Australian (November) Employment Change: +39.1K (expected +17.5K)
- USD: "Don't stop me now" (higher as Tokyo gets underway)
- Reuters poll: Most US primary dealers see no more than 2 Fed rate hikes in 2017
- The BOJ is considering an upgrade of its economic outlook
- Australia - Consumer Inflation Expectation (December): 3.4% (prior 3.2%)
- More from the BOJ Tankan - firms have a higher outlook for CPI
- FOMC recap/response: Fed "signaled a faster pace of increases in 2017"
- Responses to the Fed's FOMC: 'upbeat and more hawkish than anticipated'
- Australia press: 'AAA could go at any time'
- China November new yuan loans 794.6 bln yuan, higher than forecast
- More NZ data - Q3 Construction Work up +1.4% q/q (expected +2.1%)
- New Zealand - BusinessNZ Manufacturing PMI (November): 54.4 (prior 55.2)
- Moody's, Fitch on the Federal Reserve rate hike
USD buying continued into the Japanese morning but (finally) ran out of steam.
USD/JPY popped 117 then 117.50 (high was around 117.85) before turning back for the session. It hasn't lost too much ground, bids do still appear to be lurking.
EUR/USD dropped initially under 1.05 but couldn't stay that low; then the Tokyo morning saw another attempt and a move down under 1.0470 before it found some support to take it back above the figure. Talk of big option expiries (see bullets above) to keep it sticky around 1.05 - we'll see.
Similar patterns played out in USD/CHF and cable.
We got November employment data from Australia today, with a headline boost in jobs again. AUD/USD had dipped under 0.7400 along with the USD strength across the board but rallied after the data. NZD followed along with the AUD more or less today (it wasn't quite as strong on the bounce back).
The People's Bank of China cut the value of the CNY against the USD again today, but the extent of the devaluation against the big dollar was not as great as might have been expected. There were even reports of state-owned banks selling USD/CNY in the market today. Onshore and offshore yuan have closed their gap, funding costs in Hong Kong for CNH went up (year-end cited rather than PBOC policy moves, but given the USD/CNY selling I am a little sceptical on that).
Regional equities:
- Nikkei +0.31%
- Shanghai -0.29%
- HK -1.69%
- ASX -0.56%
