Forex news for Asia trading Tuesday 2 February 2016

A weaker USD/JPY for nearly the entire session, although the fall wasn't huge, its down around 40 points or so (a touch more at one stage ... as I update its making new lows, down 50+ now). EUR/JPY is down a little also, a small gain for EUR/USD helping it to remain steadier.

Cable and USD/CHF did little.

In China today we had the PBOC step back into 'stronger yuan' mode after yesterday's minor hiccup, USD/CNY was set a little lower today while open market operations injected a decent 100bn yuan into the market. The Shanghai Composite opened near flat and has gained for the session to be posting up over 2% as I update. The Nikkei wasn't so strong though.

For the AUD it was a wait for the RBA decision. There was a near unanimous expectation of 'on hold', & the unanimity was well founded, the decision came in as expected. As did the Statement accompanying the decision, with positive developments on the domestic front offset by concerns over what's happening in offshore economies and markets. RBA governor Glenn Stevens faces a delicate situation, the domestic improvements in the economy will threaten to send the AUD higher if we can get some stability in offshore markets (global 'risk off' moves will harm the AUD, of course). Stevens' statement today tried to walk a fine line between bank confidence on the domestic front and talk of concerns offshore. In highlighting the offshore concerns Stevens has tried to play down the strength of the Australian economy. Stevens does not want upside pressure on the AUD.

Ahead of the RBA decision the AUD was reasonably stable, trading a 20-odd point range and little changed overall. It popped on the announcement but has since come back quite heavily, plumbing new session lows as I update. Barring an offshore 'risk off' development I suspect we'll see the buyers in again circa 0.7065/70.

NZD/USD followed a similar pattern, stable for most of the session and now lower with the AUD. We'll see a dairy auction during London time which should provide impetus for a move. Expectations are for a lower dairy price index.

Gold had an early gain for a few dollars, but lower as I update; oil has lost a little on the session also.

In US politics, Clinton and Cruz won their respective Iowa caucuses (Added: Late edit ... some reports the Clinton / Sanders race is still too close to call)

Regional equities:

  • Nikkei -0.78%
  • Shanghai +2.36%
  • HK -0.79%
  • ASX -1.21%

Still to come: NZD/USD traders - heads up for the dairy auction during London time