Opening Comment

OPENING COMMENT

Much of the attention in Asia thus far has centered on the Yen and Australian Dollar, both of which come in at present as the weakest performing currencies on the day. Despite the RBA decision to raise rates by another 25bps to 3.75%, the single currency has been weighed down on a much less hawkish than expected accompanying statement from the central bank. The statement has left no bias for the year ahead, while also removing the language which discussed a “gradual lessening of stimulus.” On the data front, Australian building approvals came in much weaker than expected, but were offset by the upwards revisions to the previous print.

In Japan, there has been a lot of attention given to the news that the BOJ will announce a quantitative easing policy at the emergency meeting in a couple of hours (7:30GMT). This has forced a major round of Yen selling in Asia, with comments from FinMin Fujii accelerating the Yen depreciation after saying that he expects the BOJ to take some steps at today’s emergency meeting, while also adding that now is the time to closely monitor the currency markets. 

Looking ahead, Swiss GDP (0.3% expected) kicks things off at 6:45GMT, followed by German retail sales (0.4% expected) and UK nationwide house prices (0.4% expected) at 7:00GMT. Swiss PMI (55.2 expected) is out at 8:30GMT, with German PMI (52.0 expected) and unemployment (5k expected) following shortly after at 8:55GMT. Eurozone PMI (51.0 expected) is out at 9:00GMT, with UK PMI (54.0 expected) capping things off at 9:30GMT.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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