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12 Jun 2014
Asia Recap: Kiwi on fire as RBNZ keeps hawkish rhetoric
FXStreet (Bali) - The Kiwi was the big star in Asia, finding consistent demand following a hawkish RBNZ, while on the flip side, the Aussie ends as the main laggard on a poor Aus jobs headline.
The RBNZ, as expected by the majority of market commentators, increased rates by 25bp to 3.25%, with the accompanying statement being fundamentally hawkish, main reason that saw the NZD take off and never look back. The market is now starting to price in another rate hike by July rather than in September. RBNZ said that expectations are for the NZD to decline, however, the reiteration by Governor Wheeler that rates in the country need to return to more neutral levels, led to the strong return of bids.
AUD/USD was initially exited by the RBNZ outcome, rising from 0.9380 to 0.9409, however, heavy selling on the AUD/NZD, which broke below 1.09 and 1.0850 crucial supports, coupled with option-related protection above 0.94 and a neutral jobs report, weighed on the pair. The Aus employment change came at -4.6k, offset by the break down in full and part time changes, which saw the former increase by 27k, while the jobless rate was also kept at 5.8%. The market continues the chatter over sizeable stops above the 0.9420 level
USD/JPY traded in an uninspiring 101.97-102.13 range, with the Nikkei 225 trading in negative territory by almost 1%. The rest of G10 currencies kept familiar levels, with EUR/USD finding bids ahead of 1.35 although still well capped by 1.3550, while GBP/USD extended its bounce towards 1.68.
Main headlines in Asia
RBNZ hikes the OCR by 25bp to 3.25%
Recap: RBNZ Wheeler press conference
Japan to cut corporate tax to below 30% over several years - Nikkei
Japan Machinery Orders (MoM) above expectations (-11.9%) in April: Actual (-9.1%)
RBNZ hints at another hike in July - Westpac
Odds of another RBNZ rate hike in July increase - ANZ
Australia Consumer Inflation Expectation down to 4% in May from previous 4.4%
Australian jobs: headline disappoints, details not so bad...
China's safe to keep FX reserves at steady and reasonable level - Reuters
The RBNZ, as expected by the majority of market commentators, increased rates by 25bp to 3.25%, with the accompanying statement being fundamentally hawkish, main reason that saw the NZD take off and never look back. The market is now starting to price in another rate hike by July rather than in September. RBNZ said that expectations are for the NZD to decline, however, the reiteration by Governor Wheeler that rates in the country need to return to more neutral levels, led to the strong return of bids.
AUD/USD was initially exited by the RBNZ outcome, rising from 0.9380 to 0.9409, however, heavy selling on the AUD/NZD, which broke below 1.09 and 1.0850 crucial supports, coupled with option-related protection above 0.94 and a neutral jobs report, weighed on the pair. The Aus employment change came at -4.6k, offset by the break down in full and part time changes, which saw the former increase by 27k, while the jobless rate was also kept at 5.8%. The market continues the chatter over sizeable stops above the 0.9420 level
USD/JPY traded in an uninspiring 101.97-102.13 range, with the Nikkei 225 trading in negative territory by almost 1%. The rest of G10 currencies kept familiar levels, with EUR/USD finding bids ahead of 1.35 although still well capped by 1.3550, while GBP/USD extended its bounce towards 1.68.
Main headlines in Asia
RBNZ hikes the OCR by 25bp to 3.25%
Recap: RBNZ Wheeler press conference
Japan to cut corporate tax to below 30% over several years - Nikkei
Japan Machinery Orders (MoM) above expectations (-11.9%) in April: Actual (-9.1%)
RBNZ hints at another hike in July - Westpac
Odds of another RBNZ rate hike in July increase - ANZ
Australia Consumer Inflation Expectation down to 4% in May from previous 4.4%
Australian jobs: headline disappoints, details not so bad...
China's safe to keep FX reserves at steady and reasonable level - Reuters