Forex news for Asia trading Wednesday 23 August 2017

USD/JPY popped above 109.70 in early Asian trade, carrying on its US-time rally. It managed to get above 109.80 briefly before stabilising somewhat circa 109.70. Yen crosses were generally higher alongside.

OK, now about that 'until ...'.

It sold off 30-odd points or so, in a sharp fashion as US President Trump spoke at a rally for his supporters in Arizona. The Prez threatened a government shutdown over the border wall with Mexico. Nervousness was not confined to USD/JPY, with overnight stock index futures in the US falling also (after their strong day on Tuesday in the US on tax reform expectations).

USD/CHF dropped a few points, EUR/USD regained its Asia session earlier highs.

There were moves today also for the NZD, AUd and CAD, all losing ground against the US upon the release (and follow through) of the New Zealand pre-Election Economic and Fiscal Update

This came in with some cuts made to GDP forecast and expected surpluses down the track 9the surplus for this year, on the other hand, is expected to be higher). NZD sold off, taking AUD and CAD along with it.

Data flow today was light indeed, what we did get though was another positive read for the Japanese economy (admittedly a lower tier data point) with the preliminary manufacturing PMI coming in at a 3-month high with encouraging details.

The People's Bank of China net drained liquidity in its OMOs for the day (big injection offset and more by maturing RRs for a net drain). Money market rates are higher after consecutive net drains this week a 5-month high).

Regional equities:

  • Nikkei +0.24%
  • Shanghai -0.21%
  • HK ... closed for morning trade (typhoon)
  • ASX -0.34%

Still to come: