Forex news for Asia trading Thursday 20 June 2019
- More on the "Saudi Plant Struck by Missile, Apparently From Yemen"
- Iran claims it has shot down a US drone
- BOJ announce no change to monetary policy settings
- RBA Gov. Lowe: its not unrealistic to expect a further cut in the cash rate
- US President Trump says its important to have good relationships with China and Russia
- RBA June 2019 Bulletin - discusses a lower AUD if a China slowdown
- Gold hits its highest since 2013
- Goldman Sachs on the Fed - FOMC to cut in July and September
- PBOC sets USD/ CNY reference rate for today at 6.8805 (vs. yesterday at 6.8893)
- Another July FOMC rate cut forecast: 25bps in July, further cuts to follow
- South Korean central bank head says global economic conditions have changed very drastically
- Morgan Stanley forecasts the FOMC to cut rates in July by 50bps
- He's still at it … Trump believes he has the authority to replace Fed Chair Powell
- It should be noted that Fed Chair Powell gave the middle finger to Trump
- Australia - Business Sales Indicator (for May 2019) is showing above-average growth
- The economy could make Trump pull out of the 2020 election
- China has limited the damage to its economy by lowering tariffs on non-US imports
- New Zealand GDP for Q1: 0.6% q/q (expected 0.6%)
- ECB's Rehn warns persistent trade tensions risk becoming a global currency war
- Responses to the Fed continue - FOMC was 'notably dovish'
- UBS on the Federal Reserve - the FOMC went beyond strong dovish expectations
- Pelosi and Schumer say they did not reach an agreement on budget negotiations
- Fund manager Gundlach says Fed is behind the curve, a rate cut would increases the chance of recession
- Trade ideas thread - Thursday 20 June 2019
- More on the extra 1000 US troop deployment to the Middle East
- USD decline after the FOMC - about that dissent
- FOMC response: 'Rate cuts are in the offing … July' + 3 more probable over 12mths
Currencies and gold performed strongly against the US dollar here in Asia today. The USD fell in the aftermath of the FOMC during the US afternoon but had retraced and stabilised somewhat.
Asia was having none of that, though selling USD across the board. Yields helped the move along, the 10 year Treasury below 2%. Gold was a standout, breaking above the highs of a five-year range and extending towards 1400 (it has not reached there).
NZD/USD was also a strong performer. Q1 GDP data was released, coming in at a beat for the y/y and giving the kiwi an extra boost against already weakened USD. To put the beat in context, though, growth came in at an equal 5 year low. While the result was a relief for the RBNZ they won't be high-fiving at the office. It should, however, give them a bit of space to hold rates at the next meeting. NZD/USD extended briefly above 0.6580, surpassing its US time high.
AUD/USD traded above 0.6900, circa its US time high, and is currently 10 or so points lower. Comments today from Reserve Bank of Australia Governor Lowe are strongly indicative of a July rate cut to come, and more to follow. He reiterated the RBA wants unemployment down around 4.5%. Its currently circa 5.2% (not to mention high underutilisation to accompany that). The RBA also want more fiscal support from the government.
USD/JPY fell throughout the session, with a brief and small bounce from below 107.60. The Bank of Japan June Monetary Policy Statement was released with no change in policy and little overt (extra) dovishness. To be fair they are very dovish and loose already but with Draghi and now Powell moving even more so it may be necessary for Kuroda to join that bandwagon - he'll get the opportunity at 0630GMT Thursday at his post-statement news conference.
Added in to that lot above were a missile strike into Saudi Arabia and Iran claiming it had shot down a US drone over one of its provinces.
Still to come:
