Talking Points
- The New Zealand Dollar retreated following twin verbal bludgeonings from central bankers
- Elsewhere the US/North Korea imbroglio kept risk appetite low
- Oil prices slipped back too
Keep your Asia/Pacific market strategy sharp with the DailyFX Trading Guide
Thursday’s main market-focused Asia/Pacific action came from New Zealand.
The Reserve Bank left its key interest rate alone at record, 1.75% lows. That was expected. But Governor Graeme Wheeler went on the currency offensive soon after. He said explicitly that he felt the New Zealand Dollar was too high and reminded investors that intervention in the markets is always an option. This comment hit the kiwi, but not especially hard. However, the same sentiment was rammed home later in the Asian session by RBNZ Assistant Governor John McDermott. He said that the NZ Dollar “needs” to adjust down and that this change of language was intended as a nudge to markets.
NZD/USD duly limped into the Asian close down a big figure on the day, the only major currency mover of a session which saw AUD/USD and USD/JPY steady.
Elsewhere the continuing imbroglio between North Korea and the United States continued all-too-predictably to overshadow market action. There was little obvious advancement in this story, beyond North Korea labelling US threats “a load of nonsense.” Still, Asian equity markets slipped across the board although falls were not huge. Only the Hang Seng registered a slide of more than 1%. Staying with stocks, mining giant Glencore announced a big rise in first-half earnings which came thanks to higher commodity prices.
Crude oil prices continued to edge lower after Wednesday’s shock news of smaller US inventories, while gold prices also retreated a little from this week’s two-month highs.
The rest of Thursday’s economic focus will be on official UK industrial and trade figures, along with US jobless-claim data.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
