Back
28 Jan 2015
Asia Recap: Aussie up on Aus CPI, SGD sold as MAS eases
FXStreet (Bali) - The Australian Dollar was the main winner in Asia, the Singaporean Dollar was the big loser, while the rest of G10 FX currencies registered subdued flows ahead of the FOMC later today.
AUD/USD jumped over 1 cent from 0.79 to make a new weekly high of 0.8007 before easing off towards 0.7990, not far from the highs, after today's Australian Q4 RBA trimmed mean CPI printed a larger-than-expected inflation number (0.7% vs 0.5 exp), with the headline numbers a touch softer, but not really the main focus for the market, as clearly seen by the bullish spike in the Australian Dollar. Swaps market was pricing a 43% chance of an RBA cut as opposed to current 12% chance.
One of the unusual protagonists in Asia was the Singaporean Dollar, which fell over 1.5 cents against the US Dollar after a surprising policy easing move by the MAS. Jonathan Cavenagh, FX Strategist at Westpac, notes that "today's easing policy came via a reduction in the pace of SGD NEER appreciation, after the central bank released a statement around 8am Singapore time, which was not scheduled, as the next MAS policy meeting was not due until April."
Cavenagh adds: "The fact that the MAS felt compelled to act, inter-meeting, underscores how rapidly the inflation outlook has changed since the last policy meeting in October. Indeed in the first sentence of today's statement the central bank notes that, "Since the last Monetary Policy Statement in October, developments in the global and domestic inflation environment have led to a significant shift in Singapore’s CPI inflation outlook for 2015."
The rest of pairs, including the Japanese Yen and Kiwi, which tend to see better doses of action during Asia, traded quite subdued, with the former continuing its gradual recovery off 117.40 US lows, reaching a high of 118.30 before retracing to 118.00/10. The latter, was caught up in the midst of positive AUD flows, although sellers were parked around 0.7475 with solid offers, disallowing further progress ahead of Thursday's RBNZ, with the market getting well ahead expecting a drop of the explicit tightening bias. EUR, GBP CAD, CHF showed little moves.
Main headlines in Asia
Australia Westpac Leading Index (MoM) increased to 0% in December from previous -0.1%
Australia's core Q4 CPI rises, RBA rate cut talk overdone?
Singaporean Central Bank joins easing club - Westpac
February probably too soon for the RBA to ease - Deutsche Bank
RBNZ to shift to neutral bias - Westpac
AUD/USD jumped over 1 cent from 0.79 to make a new weekly high of 0.8007 before easing off towards 0.7990, not far from the highs, after today's Australian Q4 RBA trimmed mean CPI printed a larger-than-expected inflation number (0.7% vs 0.5 exp), with the headline numbers a touch softer, but not really the main focus for the market, as clearly seen by the bullish spike in the Australian Dollar. Swaps market was pricing a 43% chance of an RBA cut as opposed to current 12% chance.
One of the unusual protagonists in Asia was the Singaporean Dollar, which fell over 1.5 cents against the US Dollar after a surprising policy easing move by the MAS. Jonathan Cavenagh, FX Strategist at Westpac, notes that "today's easing policy came via a reduction in the pace of SGD NEER appreciation, after the central bank released a statement around 8am Singapore time, which was not scheduled, as the next MAS policy meeting was not due until April."
Cavenagh adds: "The fact that the MAS felt compelled to act, inter-meeting, underscores how rapidly the inflation outlook has changed since the last policy meeting in October. Indeed in the first sentence of today's statement the central bank notes that, "Since the last Monetary Policy Statement in October, developments in the global and domestic inflation environment have led to a significant shift in Singapore’s CPI inflation outlook for 2015."
The rest of pairs, including the Japanese Yen and Kiwi, which tend to see better doses of action during Asia, traded quite subdued, with the former continuing its gradual recovery off 117.40 US lows, reaching a high of 118.30 before retracing to 118.00/10. The latter, was caught up in the midst of positive AUD flows, although sellers were parked around 0.7475 with solid offers, disallowing further progress ahead of Thursday's RBNZ, with the market getting well ahead expecting a drop of the explicit tightening bias. EUR, GBP CAD, CHF showed little moves.
Main headlines in Asia
Australia Westpac Leading Index (MoM) increased to 0% in December from previous -0.1%
Australia's core Q4 CPI rises, RBA rate cut talk overdone?
Singaporean Central Bank joins easing club - Westpac
February probably too soon for the RBA to ease - Deutsche Bank
RBNZ to shift to neutral bias - Westpac