Forex news from the Asian trading session - 4 May 2018
Headlines:
- South Korea says US denies report that Trump ordered to mull troops cut
- Early results in local elections help to ease pressure off UK PM May
- China April Caixin services PMI 52.9 vs 52.3 expected
- RBA SoMP: Higher rates are likely to be appropriate at some point
- PBOC sets USD/CNY reference rate at 6.3521 vs 6.3732 yesterday
- Australian investors say QE poses a greater risk than China or housing downturn - Fitch
- BofA's David Woo is bullish on the dollar as headwinds start to come about
- Mnuchin says "we are having very good conversations" in Beijing
- S. Korea goods trade surplus at $9.88B in March vs 5.93B in Feb
- NIESR cuts UK 2018 growth forecast to 1.5%: Telegraph
Markets:
- AUD leads, NZD lags on the day
- Asian equities a little lower on the day
- Gold up by 0.11% to $1,313.53
- WTI down by 0.10% to $68.36
- Bitcoin down by 0.41% to $9,613
Ranges in the major pairs remain rather limited, but overall the dollar is a little weaker as we await the US payrolls later in the day. Most currencies are sitting near the highs against the greenback with EUR/USD within touching distance of 1.2000 and USD/JPY pivoting around the 109.00 level.
The key mover on the day has been the aussie, with the currency jumping higher after the RBA released its statement on monetary policy. The RBA upgraded its core inflation outlook for 2018 and the message in the statement was a bit more upbeat. Though no rate hikes are coming any time soon, it's baby steps and the market is siding with the aussie for the time being. AUD/USD jumped about 15 pips from the release to highs of 0.7553 before extending gains further.
The move in the aussie didn't quite help its neighbour with the kiwi being the laggard on the day. As the aussie gains on the day, AUD/NZD looks set to break a key technical level that has been pinning the pair down for the last two weeks - and that has seen NZD offered in the session.
In other news, we're still yet to hear anything from US-China trade talks in Beijing and the silence is putting markets a bit on edge ahead of the US jobs report that is to come at 1230 GMT.
