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2 Apr 2015
AUD selling persists, ECB's accounts in focus
FXStreet (Bali) - The Australian Dollar ended as the worst performing currency during Thursday's Asian session, while the European complex (EUR, GBP) were the main winners.
Main headlines in Asia
Australia's trade deficit close to expectations
AUD/US: Fresh lows below 0.76, Aus trade figures non-event
BOJ: Little possibility of additional monetary easing in April - Nomura
Themes dominating Asia
The Australian Dollar continued to trade heavy to a new low of 0.7570, with an initial acceleration downward some minutes prior to the Australian trade balance figures, which came largely in line with expectations, a non-event. Despite that, the bear sentiment in the pair was retained, as expectations of further easing by the RBA, falling iron ore prices, USD strength theme, and AUD/NZD targeting parity all weighing.
NZD/USD also saw a heavy tone, although losses were contained, with buyers able to regain control of 0.7440/50 intraday support after an early decline to 0.7426. NZD traders saw another poor dairy auction overnight. As ANZ notes: "The average winning price in Fonterra’s GlobalDairyTrade auction fell a further 10.8%. The fall was led by whole milk powder (-13.3%), but prices for every product sold fell at least 5%. Skim milk powder was down 9.9%."
The Japanese Yen, meanwhile, was contained by 119.50, with topside attempts well capped circa 119.70/75. There was a key economic data published by Japan today, one that the BOJ will pay close attention to. The Tankan survey of corporate price expectations, CPI came at +1.4% a year from now, 1.6 pct 3 years from now and 1.6 pct 5 years from now. As Nomura FX Strategist Yujiro Goto wrote earlier this week, "these sets of inflation expectations data, compiled by the BOJ, are closely monitored by the Bank, and will be more important than February's inflation data."
Heading into Europe
In Europe today, the main event will be ECB's accounts of its early March monetary policy meeting (due at 13.30 GMT).
As RBS FX Strategist Brian Daingerfield notes: "This meeting took place prior to the March 9th start to the ECB’s public sector asset purchases and the ECB revealed many of the underlying details of the public sector purchase program following the March decision. As a result, the accounts may provide a look at what proposals were considered as the Bank finalized the modality of the purchases that were announced in January."
"We expect the discussion of the limitations of the ECB’s available purchases, including the threshold of not purchasing any assets with yields below the deposit rate and the 25% cap on ownership of an individual issue, to be insightful", Brain added.
Looking at EUR/USD technicals, Valeria Bednarik, Chief Analyst at FXStreet, expects the pair to be bracketed between 1.0710 and 1.0865 ahead of the US Nonfarm Payroll release next Friday. As Valeria writes, "in the 4 hours chart the downside is favored, as the 20 SMA caps the upside around 1.0815, whilst the technical indicators aim higher below their mid-lines, mostly correcting oversold readings than suggesting further advances"
Main headlines in Asia
Australia's trade deficit close to expectations
AUD/US: Fresh lows below 0.76, Aus trade figures non-event
BOJ: Little possibility of additional monetary easing in April - Nomura
Themes dominating Asia
The Australian Dollar continued to trade heavy to a new low of 0.7570, with an initial acceleration downward some minutes prior to the Australian trade balance figures, which came largely in line with expectations, a non-event. Despite that, the bear sentiment in the pair was retained, as expectations of further easing by the RBA, falling iron ore prices, USD strength theme, and AUD/NZD targeting parity all weighing.
NZD/USD also saw a heavy tone, although losses were contained, with buyers able to regain control of 0.7440/50 intraday support after an early decline to 0.7426. NZD traders saw another poor dairy auction overnight. As ANZ notes: "The average winning price in Fonterra’s GlobalDairyTrade auction fell a further 10.8%. The fall was led by whole milk powder (-13.3%), but prices for every product sold fell at least 5%. Skim milk powder was down 9.9%."
The Japanese Yen, meanwhile, was contained by 119.50, with topside attempts well capped circa 119.70/75. There was a key economic data published by Japan today, one that the BOJ will pay close attention to. The Tankan survey of corporate price expectations, CPI came at +1.4% a year from now, 1.6 pct 3 years from now and 1.6 pct 5 years from now. As Nomura FX Strategist Yujiro Goto wrote earlier this week, "these sets of inflation expectations data, compiled by the BOJ, are closely monitored by the Bank, and will be more important than February's inflation data."
Heading into Europe
In Europe today, the main event will be ECB's accounts of its early March monetary policy meeting (due at 13.30 GMT).
As RBS FX Strategist Brian Daingerfield notes: "This meeting took place prior to the March 9th start to the ECB’s public sector asset purchases and the ECB revealed many of the underlying details of the public sector purchase program following the March decision. As a result, the accounts may provide a look at what proposals were considered as the Bank finalized the modality of the purchases that were announced in January."
"We expect the discussion of the limitations of the ECB’s available purchases, including the threshold of not purchasing any assets with yields below the deposit rate and the 25% cap on ownership of an individual issue, to be insightful", Brain added.
Looking at EUR/USD technicals, Valeria Bednarik, Chief Analyst at FXStreet, expects the pair to be bracketed between 1.0710 and 1.0865 ahead of the US Nonfarm Payroll release next Friday. As Valeria writes, "in the 4 hours chart the downside is favored, as the 20 SMA caps the upside around 1.0815, whilst the technical indicators aim higher below their mid-lines, mostly correcting oversold readings than suggesting further advances"