Forex news for Asia trading Friday 14 August 2020
- RBA Gov Lowe says intervention to lower the AUD would not be successful
- NZ Activity Index for July: +2% y/y (June was +0.6%)
- China activity data for July - industrial production, retail sales and more
- China July new home prices +0.47% m/m (June was +0.58%)
- ANZ in NZ says downside risks are coming to fruition, chance of negative cash rate 'rapidly increasing'
- RBA Gov Lowe says he would like the AUD lower, but its not overvalued
- PBOC says it will conduct an MLF operation on Monday
- South Korea has reported 103 new confirmed COVID-19 cases today
- PBOC sets USD/ CNY reference rate for today at 6.9405 (vs. yesterday at 6.9429)
- FX option expiries for Friday August 14 at the 10am NY cut
- New Zealand report 12 new coronavirus cases today
- RBA Lowe says its possible the cash rate will be 0.25% for the next 5 years
- Yen analysis - USD/JPY resistance close by, EUR/JPY higher
- RBA Gov Lowe says not expecting a lift in economic growth until December quarter
- Citigroup Pays Revlon Lenders Nearly $900 Million by Mistake
- New Zealand new coronavirus cases continue to rise - new doubt that lockdown will end Friday
- Australian state Victoria reports 372 new cases of COVID-19
- New Zealand - BusinessNZ manufacturing PMI for July: 58.8 (prior 56.3)
- Japan's Amari is against a cut to the sales tax rate
- Trump says his attitude towards China is not friendly
- Coronavirus - UK PM Johnson announces lockdown changes from this weekend
- The US has confiscated vessels allegedly loaded with Iranian fuel in violation of sanctions
- Coronavirus - UK to impose a 14 day quarantine on arrivals from France, Netherlands
- Trade ideas thread - Friday 14 August 2020
- No new record highs. The NASDAQ and S&P back off from all time highs
- More from Kudlow - says Trump will not raise his coronavirus relief offer
- Kudlow says he expects the unemployment rate to drop in single figures in the August report. LOL.
Reserve Bank of Australia Governor Lowe appeared in front of a parliamentary committee for one of his twice a year testimonies. In his prepared remarks he stuck to familiar themes:
- economic recovery is dependent on COVID-19 developments (the outbreak and response in Victoria has delayed national recovery)
- sees the unemployment rate rising to 10% by the end of 2020 and a gradual fall thereafter
- has not ruled out a further bond buying program
- monetary financing of the government debt is not on the agenda
- the rise in public debt is manageable
- the RBA will do what it can, more if necessary, but more fiscal support is needed
Later the Gov followed up with comments directly on the Australian dollar:
- would like it to be lower
- cannot say it is overvalued at present
- its no surprise the AUD is where it is, he does not have the tools to get it lower
And later he added more on that last point:
- would need huge amounts of intervention to push the AUD down
- doubt the RBA can do that
- intervention would not be a successful strategy at presentations
As I post AUD/USD is little net changed on the session. It had moved about 15 or so points higher from its early low but has since retraced.
NZD/USD has followed a similar pattern and it too is back near session lows in a small range only. There were further cases of coronavirus reported from NZ today. Today is the day the lockdown in NZ is supposed to end. As I post there has been no news on if this is still the case, or if it is to be extended, but a lockdown extension would appear likely.
From China we had economic activity data for July, both industrial production and retail sales for the month came in under estimates, with the more substantial, and more disappointing, being the miss on retail sales. A languishing consumer sector is not a positive for China growth, it will remain slow.
EUR, GBP against the USD followed a similar pattern to AUD and NZD, both also in tight ranges. USD/CAD is up a bare few tics net while USD/JPY and USD/CHF are also little changed.
Gold tracked more or less sideways around $1,955 but is dropping away a few dollars as I update.
Still to come:
