Forex news for Asia trading Friday 14 August 2015

China

  • "Major state banks are suspected of buying yuan whenever it nears 6.4"
  • Goldman Sachs on China yuan - Devaluation signals negative global conditions
  • With today's revaluation has the PBOC now set a 'boundary' for the yuan?
  • People's Bank of China (PBOC) sets yuan reference rate at 6.3975
  • Citi agrees with the PBOC, no need for further yaun devaluation
  • PBOC yuan fix due at 0115GMT ... what the rate will be
  • What does the yuan devaluation mean for the Fed? Quick Deutsche Bank comment

Australia, New Zealand:

  • More from RBA's Kent: Further pass through of AUD fall still to come through
  • RBA's Kent: Expects unemployment to stay steady through 2016 & fall in 2017
  • More on the NZD .... downgrades etc.
  • New Zealand - Q2 retail Sales (ex. inflation): +0.1% q/q (expected +0.5%)
  • Several foreign owners of residential property across Australia have been ordered to sell

Greece

  • WSJ: New assessment says serious concerns about sustainability of Greek government debt
  • German dep. finmin: 3rd bailout an opportunity for Greece eco growth, stay in EUR zone
  • IMF Greece statement: Memorandum of Understanding ... a very important step forward
  • IMF on Spain: Economic recovery has accelerated, structural problems limit potential
  • EUR/USD technical analysis from JP Morgan - key levels for the bulls
  • Goldman Sachs to share its proprietary trading tools
  • US believes Islamic State likely used mustard agent in attack on Kurds in Iraq
  • The Japanese press is not impressed with the PBOC & their yuan doings
  • Trade ideas thread for Friday 14 August 2015

Eyes were on China and the People's Bank of China yuan fix again today, but we also got impactful news out of New Zealand and headlines picking up again on Greece.

The PBOC took their foot off the devaluation pedal today, with the yuan strengthening 0.05% against the USD (don't spend it all at once, K?). This comes after declines this week of:

  • -1.9% on Tuesday

  • -1.6% on Wednesday

  • -1.1% Thursday

It probably ain't over ... but a respite today at least.

Regional currencies didn"t benefit too much though, with the Malaysian Ringgit a big loser again, down more than 2.5% to its lowest since September 1998. Oil prices & political crisis (state-owned fund losses) both cited again as contributing to the decline.

In the majors, the stlight yuan strengthening saw USD/JPY climbed a few points to session highs above 124.50 briefly before it settled back to be more or less unchanged on the day.

Earlier in the day we got Q2 retail sales data from New Zealand, which came in well below expectations and saw some selling hitting the NZ dollar. NZD/USD declined, while AUD/NZD was bid, and those moves continued for most of the session.

AUD/USD also had input from RBA Assistant Governor Kent, who had a slightly upbeat take on the developments in the labour market, which gave the AUD a boost, to above 0.7380 before it retraced its entire 20-odd point gain to be more or less unchanged on the session as I update. It benefited from the yuan fix, from AUD/NZD buying, and from Kent's tone ... but hasn't managed to sustain its gains.

EUR, CHF and GBP all traded small ranges. EUR/USD popped above 1.1160 early, drifted back to 50 then popped 60 again briefly in the Tokyo morning before losing its way down to just under 1.1140 and then a bounce to above 1.1150 again as I update. It looks like Greek headlines might start to increase as negotiations intensify in coming days, indeed we got a few headlines today.

Oil lost ground early in the session here but recovered to be only a few cents lower as i update. Gold is a little lower also, but not a lot in it.