ForexLive Asia wrap: Another Range-day After European and Nth American Gyrations
New Zealand January Merchandise Trade Balance surprised to the downside with a deficit of 305m (vs. +125m expected). Exports came in lower than expected (3.35bn vs. 3.6bn expected), while (you guessed it) imports were higher than expected (3.65bn vs. 3.5bn expected)
NZ finance minister Bill English spoke at a business lunch, there was nothing of much immediate significance for the NZD
In Japan, January Retail Trade showed a good improvement, coming in at +2.3%m/m (vs. +0.9% m/m expected) and -1.1%y/y (vs. -1.5% y/y expected)
Moody's comments crossed the wires, saying the Italian election is indirectly a credit negative for other pressured EU sovereigns
Not to be outdone, S&P issued a report on Australia, saying its economy and debt position was strong, but noted potential threats
The ABS issued data showing the value of construction activity in Australia fell 0.1% in Q4 2012 from Q3 (notably building and residential construction work rose, while engineering work - mines, roads, bridges etc.- fell; this may not be viewed negatively by the RBA as it seeks to find evidence of growth outside the resource extraction and related sectors of the Australian economy)
Adam Posen (ex-BOE and President of the Peterson Institute for International Economics) was on Bloomberg TV saying very positive and supportive things about the new-look BOJ
Bloomberg reported that while Kuroda was seen as getting DPJ support for appointment to the BOJ, Kikuo Iwata may me opposed
A day of limited range trading in the currencies.
EUR/USD ran into offering interest around 1.0365 and traded down a little on the back of Moody's Italian comments (that only really stated the obvious), finding support a few spreads lower ahead of 1.3040. A tight range indeed given the activity we are seeing in Europe and North America. GBP/USD, too, had a very tight range around 1.5120.
AUD/USD saw enormous volumes from 1.0245/50 to 1.0200/05 in North America, and couldn't break that range in Asia today. US names have been the biggest sellers, Australian exporters and banks said to be largest buyers as it slipped. It lost ground on the back of the S&P report (see bullets above) but ran into bids ahead of 1.0200 again.
And so we turn to yen, where most of the activity was again today. It traded higher in the morning to above 92.15 and lost ground seemingly on the back of Moody's-related EUR/JPY selling. Japanese names were on the bid ahead of 91.65 and it managed to recover some ground after Posen's comments were reported.
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