It was a sedated affair in Asia FX, with weakness in both Yen and the antipodean complex (AUD, NZD) the most notable events, despite moves were relatively small ahead of the ECB meeting later today.
AUD/USD, which was hammered over 1.5 cents from Wed's high, extended its losses, if only marginally, setting a new multi-week low at 0.8056, with ANZ putting out a note suggesting that the days of AUD/USD trading above 0.80 are numbered, soon to see an acceleration of losses. The market is currently pricing in a 36% chance of a 25 BP RBA cut in Feb and 41 BPS worth of cuts over the year. NZD/USD was also pressured despite solid domestic data, with a low inflation print on Wednesday, and the correlation factor with the Australian Dollar, weighing on a 'wingless' Kiwi.
USD/JPY managed to build up on gains accomplished during the NA session, with traders first accumulating orders on a 30-pip range from 117.80 to 118.10, before a spike towards a 118.31 session high, as the Nikkei 225, which started the day in negative territory, got back to its flat line. At present levels, the pair has recouped yesterday's BoJ-induced losses in its entirety, with a resumption of the uptrend looking increasingly likely.
The rest of the G10 FX space, including the Canadian Dollar, which was completely annihilated on the surprising BoC rate cut, saw tight accumulation moves ahead of Europe. While it needs little reminder, given the significance of the meeting, today's market focus will almost exclusively be in the ECB policy outcome, with talk - via Reuters/Bloomberg- of a EUR 50bln/month QE package, likely to begin in March, and with the program extending through 2016.
Main headlines
NZ Business PMI shows solid expansion in Dec 2014
BoC rate cut = RBA to follow suit?
Japan Foreign bond investment down to ¥-397.2B in January 16 from previous ¥455.1B
Japan Foreign investment in Japan stocks increased to ¥-577.4B in January 16 from previous ¥-684.4B
Australia: Inflationary expectations fell in January - Melbourne Institute
New Zealand's consumer confidence upbeat in January
Australia HIA New Home Sales (MoM) down to 2.2% in November from previous 3%
AUD/USD, which was hammered over 1.5 cents from Wed's high, extended its losses, if only marginally, setting a new multi-week low at 0.8056, with ANZ putting out a note suggesting that the days of AUD/USD trading above 0.80 are numbered, soon to see an acceleration of losses. The market is currently pricing in a 36% chance of a 25 BP RBA cut in Feb and 41 BPS worth of cuts over the year. NZD/USD was also pressured despite solid domestic data, with a low inflation print on Wednesday, and the correlation factor with the Australian Dollar, weighing on a 'wingless' Kiwi.
USD/JPY managed to build up on gains accomplished during the NA session, with traders first accumulating orders on a 30-pip range from 117.80 to 118.10, before a spike towards a 118.31 session high, as the Nikkei 225, which started the day in negative territory, got back to its flat line. At present levels, the pair has recouped yesterday's BoJ-induced losses in its entirety, with a resumption of the uptrend looking increasingly likely.
The rest of the G10 FX space, including the Canadian Dollar, which was completely annihilated on the surprising BoC rate cut, saw tight accumulation moves ahead of Europe. While it needs little reminder, given the significance of the meeting, today's market focus will almost exclusively be in the ECB policy outcome, with talk - via Reuters/Bloomberg- of a EUR 50bln/month QE package, likely to begin in March, and with the program extending through 2016.
Main headlines
NZ Business PMI shows solid expansion in Dec 2014
BoC rate cut = RBA to follow suit?
Japan Foreign bond investment down to ¥-397.2B in January 16 from previous ¥455.1B
Japan Foreign investment in Japan stocks increased to ¥-577.4B in January 16 from previous ¥-684.4B
Australia: Inflationary expectations fell in January - Melbourne Institute
New Zealand's consumer confidence upbeat in January
Australia HIA New Home Sales (MoM) down to 2.2% in November from previous 3%
