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Asian recap: dull session; Aussie on the upside despite weak CPI

FXStreet (Moscow) - It has been pretty quiet in Asian on Wednesday. Nothing’s going on as markets are bracing themselves for risk events scheduled for today, including BOE minutes and US CPI numbers. Australian inflation report seems to be the most exciting event of the Asian session today. The numbers came out mostly in line with expectations, though the core CPI slowed the previous quarter, thus supporting the view that the RBA would keep its interest rates at record lows for a prolonged period of time. Considering RBA’s minutes published yesterday, and the latest RBA officials comments, markets learned nothing new from this set of data, but Aussie pairs experienced a short period of higher volatility. Japanese trade balance registered a bit higher than expected trade deficit in September, while exports increased 6.9% y/y after a sudden drop by 1.3% in August. Japanese stock markets were happy to know about export growth and continued to trade with a strong bid during Tokyo hours. The Nikkei 225 has closed for lunch with 1.71% gains at 15,057.47, while the Topix gained 1.84% and settled at 1,227.51. Currency traders ignored the news and did not let JPY out of tight rangers.

AUD/USD  dipped towards 0.8745 following the Australian CPI report, but quickly regained ground and ouched the Asian high at 0.8797. Currently the pair is trading at 0.8793 as strong offers spotted on approach to 0.8800 cap further upside. Once this resistance is cleared Aussie might move towards the next bullish target at 0.8830/40.

NZD/USD  started Wednesday at 0.7957 and managed to climb to 0.7985. A sustained break above the bespoke resistance of 0.800 level is needed for kiwi to extend the upside towards Tuesday’s high at 0.8032. NZD fundamentals are weak, while the upside is supported solely by technical factors and USD mild sell-off against Aussie.

USD/JPY  weakened to 106.85 after having touched the Asian high at 107.11. The pair is sitting in a tight range despite positive Japanese stock market developments. It seems that traders are not inclined to do much ahead of US CPI numbers that may trigger USD sell-off if the report proves that the inflation is weakening.

Other majors, namely EUR/USD and GBP/USD are sitting in tight ranges with light bullish bias, as players are waiting for European players to join the game and add some excitement. EUR/USD is trading at 1.2730 after having touched the Asian low at 1.2706. GBP/USD started the day at 1.6115 and climbed towards 1.6128 ahead of BOE minutes published later during the day.

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