FXStreet (Mumbai) – A calmer Asian session, with broad based USD weakness emerging the underlying theme across the FX space. The entire Antipodean complex benefitted as the USD bulls took a back seat. However, USD/JPY remained better bid and consolidates below 121 handle as traders continue to digest a mixed set of data released in the US last session.
Key headlines in Asia
Asian stocks trade mixed, cautious ahead of Fed
New Zealand Business NZ PMI: 55 (August) vs 53.5
Dominating themes in Asia – centered on JPY, AUD, NZD
With nothing significant on the macro calendar reported today, the Asian traders shifted their attention towards a slew of Chinese economic releases over the weekend and next week’s Fed rate decision appear to have turned a bit cautious on Friday. The US dollar extended weakness against its major competitors after uncertainty over the outlook of Fed interest rates and mixed US data released on Thursday weighed on the buck.
The Antipodean currencies enjoyed some gains on the back of a subdued US dollar, with the Kiwi emerging the biggest beneficiary. NZD/USD rebounded in Asia and regained 0.63 barrier, reversing a part of yesterday’s RBNZ-led slump. While the AUD/USD pair was better bid as traders digest the recent Australia’s jobs report and await China’s industrial production and retail sales data due later this weekend for further direction.
The Japanese yen extended weakness versus the US dollar on the back of diminishing bids for safe-haven assets as Asian stock markets were seen stabilizing. USD/JPY keeps range below 121 handle, consolidating the gains seen in the previous session.
Meanwhile, the Asian markets steadied on Friday after a volatile week, with the Japan’s benchmark index, the Nikkei, muted around 18,308. While the Hong Kong’s benchmark Hang Seng index advances 0.70% to 21,711 and the Shanghai Composite trading modestly flat at 3,195. The benchmark Australian S&P/ASX 200 was almost unchanged at 5,094.
Heading into Europe – centered on EUR, GBP
A quiet EU calendar ahead to finish a data-light week, with German final CPI and UK’s construction output data to be reported.
Germany’s statistical office will publish the final CPI report for August. The preliminary print revealed a slowdown, with the headline gauge flat on a monthly basis and barely growing on the annual basis. The final report will most likely confirm this.
Besides, the Euro group meeting will take place, with Greece expected to be the main topic.
Moving on, we have an eventful New York session later tonight, as the US calendar brings a set of key economic releases – PPI and prelim consumer sentiment.
EUR/USD Technicals
The AceTrader Team notes, “Euro’s rally to 1.1295 yesterday and intra-day breach of this level signals the rise from last Thursday’s trough at 1.1087 to retrace the decline from August’s peak at 1.1715 remains in progress and consolidation with upside bias would be seen for gain towards 1.1300/02, then marginally higher. However, loss of momentum would prevent strong rise above there and reckon resistance at 1.1332 would hold and yield a much-needed correction later.”
“On the downside, only below 1.1229 (previous resistance, now support) would indicate a temporary top has been made and yield stronger weakness towards 1.1172.”
(Market News Provided by FXstreet)