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Asia Recap: USD weakness main theme

FXStreet (Bali) - The US Dollar was the main laggard in Asia, with Friday's US NFP-inspired losses extending, allowing the Aussie and Kiwi to end as the top performers on the back of positive Chinese data over the weekend.

AUD/USD was lifted to a new session high of 0.8675, with the short squeeze intensifying during interbank trading in response to a positive Chinese trade balance, exports coming especially strong. Later in Asia, a steady Chinese CPI, seen as AUD risk removed, led to a second round of buying in the pair. NZD/USD also traded higher in sync with the Aussie, reaching its highest at 0.7792. USD/JPY added pressure towards 114.00 support, although good-sized bids kept protecting the level. Note that a break below the round number would confirm a double top is in place, implying that further downside risks is possible, which in turn may trigger a further squeeze in USD longs. Both EUR/USD and GBP/USD edged higher, with gains limited by 1.2485 and 1.5910 respectively.

In terms of economic data, China's trade balance came in at $45.41B in October, with imports (YoY) at 4.6% vs 5.5% exp, while exports were 11.6% vs 10.6% exp. As per China CPI, the Oct MoM came in at 0%, below expectations of 0.1%, with the YoY in line with forecasts (1.6%). In Australia, investment lending for homes was up by 3.7% in September from previous -0.1%, while home loans were above expectations (-1%) in Sept, with actual (-0.7%).

In the macro space, following speculation that the ECB's Draghi might be headed off for a new position as Italian President, over the weekend, la Repubblica reported that he is not interested in replacing 89-year-old Giorgio Napolitano. Deutsche Bank published a note reminding the trading community that the supportive effect on the NZD from the Canterbury settlements will disappear in coming quarters. Meanwhile, Bank of New Zealand explained that "there is a popular perception that Wed's Financial Stability Report (FSR) by the RBNZ may be used to announce the removal of its loan-to-value-ratio (LVR) restrictions." In Catalonia, Spain's region symbolic vote for independence showed 1.6 million people or 81% of the total voting for a Catalonia independent from Spain.

Catalonia votes for independence

With over 88% of polling stations counted, Spain's Catalonia region symbolic vote for independence shows that 1.6 million people or 81% of the total voted for a Catalonia independent from Spain. The Final turnout projected by varies local news organizations points at 2.25 million, which means approximately 30% of its entire population.
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