Forex news for Asia-Pacific trading on August 19, 2021:
- Australia July employment +2.2K vs -46.2K expected
- New Zealand PM: 11 new cases but believe they've found initial case
- Japan August Reuters Tankan manufacturing +33 vs +25 prior
- Goldman Sachs cuts US Q3 GDP forecast to 5.5%
- RBNZ continues to warn on housing
- Biden: There are 85 million eligible Americans who are unvaccinated
Markets:
- Gold down $9 to $1778
- US 10-year yields down 1.1 bps to 1.261%
- WTI crude oil down 92-cents to $64.57
- Nikkei -0.8%
- USD leads, NZD lags
Once Tokyo ramped up today, the dollar buying was relentless and across-the-board. It's tough to find any kind of fundamental underpinning for the move. The FOMC Minutes were dovish and Treasury yields were lower in Asia.
I look to USD/JPY flows as the probably driver, though the euro ran some stops on the way through 1.1700 and is threatening to run more, as are the antipodeans as they continually hit new lows.
The dollar trade is spilling into commodities once again and that's created a bit of a feedback loop in commodity currencies. NZD/USD tried to make a stand after Orr yesterday but that's looking increasingly futile as it drifts further below 0.6900 and down to 0.6853.
Australia delivered a surprisingly strong jobs report and initially AUD/USD gained 10-15 pips but the move was swamped as the data represents July and the outlook for August and September is increasingly threatened. It does say thought that people are finding ways to deal with covid. Even with that, AUD hasn't even been able to keep up with the languishing loonie.
I'll be keeping a very close eye on this USD move once Tokyo goes offline and as levels continue to fall. It's the kind of move that could fizzle out in a reversal or set off a real spike in the dollar. Given the price action so far in the day, it's a moment to be on high alert.
