Forex news for Asia trading Wednesday 24 August 2016

  • PBOC liquidity injection today, 7- and 14-day reverse repos
  • USD gains (nearly) across the board
  • M6.4 earthquake in Italy (near Perugia)
  • Australia - Construction Work Done (Q2): -3.7% (expected -2.0%)
  • PBOC sets yuan reference rate for today at 6.6420 (vs. yesterday at 6.6586)
  • China plans to close 345 medium and big zombie SOEs
  • 9 Australian myths about China ... #8 is the most interesting
  • Yellen to speak Friday (timing unknown) - don't expect rate hike timing guidance
  • NZ July Trade Balance: -433m (expected -325m, prior +127m)
  • More on North Korea's ballistic missile launch - lands in Japan's air defence zone
  • Scotland's Sturgeon to appoint a Brexit minister
  • The mouse that roared - US government manipulation of the cheese market
  • Yonhap report Nth Korea have fired a submarine-launched ballistic missile
  • Trade ideas thread - Wednesday 24 August 2016
  • Oil - private inventory data shows surprise build

Ranges for the currencies in Asia today were fairly subdued, but we did see net USD strength across the board. News and data flow was fairly light.

USD/JPY ticked higher in the earlier part of the morning, from around 100.20 odd when US trade wound up it moved to circa 100.50 before dribbling back 25 or so points and then stabilising in a 15 or so point range.

Early data from NZ (trade balance, a bigger deficit than expected) saw the kiwi under small selling pressure (as i said above, ranges were not large). NZD/USD fell as low as just under 0.7270 through the session, with the high on the bounce from there just above 0.7290 and a 20 point range back to its lows thereafter. AUD was a little heavy also, to circa 0.7600 on the session. Data from Australia (skilled vacancies and Q2 construction activity was on the disappointing side (see bullets above)).

EUR, CHF and GBP all lost a few points against the USD.

The People's Bank of China conducted 14-day reverse repos (in addition to the more regular 7-dayers), the first since February of this year. The bank is gauging demand for more again tomorrow (more in the bullets above about what appears to be the intention of this policy).

Central Italy was hit by a strong earthquake (appears to M6.2) and continuing aftershocks. Details of injuries are yet to surface, but there has been loss of buildings so the news could be be grim.

Pic via USGS - on the left you can see the list of quakes

A North Korean submarine managed to launch a ballistic missile (test); the missile landed inside Japan's air defence zone (the first time the North Koreans have managed to do this)

Regional equities:

  • Nikkei +0.50%
  • Shanghai -0.02%
  • HK -0.84%
  • ASX +0.21%