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Asian Recap: kiwi drops like stone, Aussie struggles to benefit on Chines PMI

It has been a busy day for antipodean currencies, while major pairs have been pretty quiet, going with the tide of stronger USD. New Zealand Consumer Price Index was a nasty surprise: the report published early in Asia signaled that the pricing pressure decreased in the third quarter. (0/1% y/y on Q3 against 1.6% y/y in Q2). The news supported the view that RBNZ would sit on the fence for a considerable period of time and, probably, continue making angry noises about strong kiwi. As a consequence, NZD/USD dropped below 0.7900 and lost nearly 100 pips within a few hours. Currently the pair is trading at 0.7846 after having touched the low at 0.7831. It seems that dust has settled and traders are taking profit from their short kiwi positions.

Another big story is flash HSBC/Markit manufacturing purchasing managers' index in China. The number came out better than expected at 50.5 (against expected 50.03 and previous 50.2). Still nothing to crow about, but that seemed to be enough to trigger AUD/USD rally from the Asian low at 0.8748 towards 0.8774. The upside movement was not sustained as the pair retreated towards 0.8757.

Asian stock indices dragged down on Thursday following the Wall Street retreat. Lower oil prices added to the downside pressure as they underline investors’ concerns about global economy growth. Japanese stocks have posted a small rally during early hours, that was quickly reversed by the mid-day. The Nikkei 225 was down 0.17% at 15,169.57, while the Topix was down 0.27% at 1,233.06. USD/JPY  has been drifting higher and managed to climb to 107.35, though the reported offers on approach to 107.37/39 capped the upside for the time being. The pair needs a sustained break above this area to continue the upside towards the next short-term target at 107.50.

EUR/JPY  is trying to recover from Wednesday’s losses. The cross is moving towards 135.70 resistance on the back of JPY weakening against USD. Should this level is clearly broken, the cross may extend the upside towards 136.00. While downside is limited by 1035.50 support, negative EUR sentiments during European session might change EUR/JPY fortunes.

AUD/JPY popping onto the 94 handle

AUD/JPY is trading at 94.02, down -0.03% on the day, having posted a daily high at 94.12 and low at 93.80.
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EUR/USD under pressure, ready to resume downside

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