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Asia Recap: Intraday AUD swings, NZD main laggard

FXStreet (Bali) - The New Zealand Dollar and Japanese Yen were the worst performers in Asia, with the USD again dominating.

The AUD was the main mover in Asia, first finding HFT-led buying interest on a positive Aus Q2 GDP read (+0.5% vs +0.4% exp), although offers lying above 0.93 took back control of price action, sending the rate briefly below 0.9270 before consolidating within a 0.9270-0.9290 range following the speech of RBA Stevens, in which familiar themes were noted.

Overall, Stevens speech was perceived as neutral, by the fact that he mentioned "unwise to further inflate house prices with rates", coupled with "has made his views clear on the high AUD, won’t repeat them", it communicates that for now, risks of either lower rates or jawboning are well contained.

With regards to JPY, further weakness was again the theme, with the rate being paid as high as Y 105.33, as the market keeps pricing in the appointment of the Deputy Policy Chief of the LDP, Mr. Shiozaki, as the next Minister of Health, Welfare, and Labor(unconfirmed).

As Nomura notes, "The Deputy Policy Chief, Mr. Shiozaki has been driving discussions on the GPIF's reform, and is showing a positive stance on the GPIF's portfolio allocation and governance reform. Thus, his appointment will be regarded as positive for GPIF reform."

NZD performance keeps being very poor, with another disappointing dairy auction the key driver keeping sentiment towards the Kiwi at very low levels, as the exchange rate shows, trading below the $0.83 handle.

GBP continued to bleed lower, hitting its lowest at 1.6444 as the increased odds of a 'Yes' vote on the Scottish independence referendum on Sept 18 pressure Sterling valuation. The Euro, meanwhile, was yet again rejected off 1.3135-40 parallel resistance, en-route to 1.31 now.

In other fundamental news, New Zealand Q2 construction work came at +1.0% q/q, in line with expectation. In the UK, August BRC Shop price index stood at -1.6% y/y vs -2.0% expected. In Australia, other than the Q2 GDP (0.5 % q/q vs +0.4%), the AIG performance of services index for August was 49.4, almost unchanged from last 49. In China, the service PMI for August was 54.4 vs. 54.2 prior, while the HSBC services PMI for August was very encouraging at 54.1 vs 50.00. In the US, President Obama authorized sending 350 more troops to Iraq to protect Baghdad embassy, Bloomberg reported. In Japan, the Markit/JMMA services PMI for August came at 49.9 vs 50.4.

Main headlines in Asia

Kiwi struggles after latest declines in dairy auction - ANZ

Slight recovery in BOJ easing expectations into 2015 - Nomura

Key day for GPIF prospects as Japan reshuffles cabinet

China Non-manufacturing PMI climbed from previous 54.2 to 54.4 in August

Australia's Q2 GDP comes above estimates

Japan Markit Services PMI rose from previous 50.4 to 50.8 in August

China HSBC Services PMI soars in August

Recap: Australian Q2 growth figures - ANZ

RBA Stevens: Unwise to further inflate high house prices with rates

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