ForexLive Asia FX news: NZD the big mover, CPI up, but there are buts

Author: Eamonn Sheridan | Category: News

Forex news for Asia trading Thursday 20 April 2017

NZD was a big mover today, jumping on the release of New Zealand first quarter inflation data (NZ inflation data is only once a quarter). The q/q and y/y inflation headline came in higher than expected, the y/y jumped above the Reserve Bank of New Zealand target band mid-point for the first time in 5 years.

The higher headline inflation was driven bigly (we need to say bigly more often, right?) by higher petrol, and cigarettes and tobacco prices (note that cigarette & and tobacco taxes are raised each year in NZ ... in March!). Such rises will be transitory and inflation will not maintain at the levels announced today, thus the impact on RBNZ policy of today's data is minimal. Indeed, the RBNZ foreshadowed temporarily higher inflation in March statement.

Nevertheless,  the higher inflation number prompted an immediate marking higher of the NZD, to circa 0.7040 and its traded thereabouts and just under ever since, as I update.

Elsewhere ranges were subdued indeed. The underperfoming AUD had a better session than recently, edging a few tics higher net. We saw, once again, a good business conditions and confidence survey (NAB's quarterly business survey). A little watched gauge of spending in the economy also returned strong results for March (CBA business sales, in bullets above)

Yen movement was subdued also, a 25 or so point range only. March trade balance data from Japan showed a strong surge in exports (see bullets above).

EUR, CHF and GBP are all little changed against USD.

The People's Bank of China sliced the yuan value against the USD, its biggest drop on the reference rate for 3 weeks. China's State Administration of Foreign Exchange (SAFE) followed up by telling us the country doesn't need to depreciate the yuan to boost exports. Go figure.

Regional equities:

  • Nikkei +0.31%  
  • Shanghai -0.10%
  • HK +0.34%
  • ASX +0.20%