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Asia Recap: USD recoups some losses

FXStreet (Bali) - On Wednesday, we saw the same dynamics along Asian hours as seen yesterday, that is, US traders pushing the USD lower, with Asian accounts resetting longs in the currency.

The Aussie was the main laggard, losing 0.8770 key support from 0.8830 key resistance, after the Australian Bureau of Statistics announced, in a media release, that they will change seasonal adjustment of monthly labour force estimates, something that, as ABS states "will result in revisions to the previously published July and August seasonally adjusted estimates."

According to Westpac: "If the ABS turns the seasonal factors off for July, Aug and Sep then given no other changes by the ABS (something we can’t guarantee) we estimate the following revisions to the estimate for total employment. July will be revised from –4.1k to +3.5k. Aug will be revised from +121.0k to +32.1k. The revisions also take the annual pace of employment growth down from an unbelievable 2.2%yr to a more respectable 1.5%yr which is more in line with Westpac’s Jobs Index."

The Kiwi was also pushed lower, dragged by its Australian cousin, with the rate losing the 0.78 mark. Meanwhile, the Japanese Yen saw its rate against the US Dollar at Y 108.35/40 after a brief drive below 108.00 late in the NY session, with a significant decline in US stocks weighing on Yen crosses and US bond yields. Euro and Sterling were also modestly weaker on USD strength.

With regards to Yen strength, Sean Lee, Founder at FXWW, mentioned the following: "I’m continuing to hear reports of hedge funds having to return money to Russian investors due to worldwide financial sanctions. This is leading to positional liquidation of longer term trades in the FX market, like everyone’s favourite USD/JPY trade, and in FI as well."

It is also worth reminding traders of a recent Bloomberg article, in which it highlights increasing discontent by Japanese policy-makers on BoJ easign policies, and the necessity to discuss a potential exit strategy.

In other fundamental news, the UK BRC Shop Price Index for September came at -1.8% YoY vs -1.6% last. Japan current account balance for August stood at Y 287.1b VS Y 200.0b last. China's HSBC/Markit Services PMI for September came off its August peak to stand at 53.5 vs 54.1 last.

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