By: Adam Button
Hong Kong press: China and Australia discussing direct FX trading Japan May retail sales +3.6 y/y vs +2.9% y/y exp Fed's Lockhart: Conditions don't call for stronger Fed action UK to hand over 1.3B pound to EIB Former MPC member Goodhart: July bond buying "fairly odds on" Australia HIA home sales +0.7% m/m NZ business confidence hits 15-month low Australian job vacancies down 5.3% in May quarter Nikkei +1.2%, possibility of breaking 5-week high King Dollar took a thumping in Asia-Pacific trading. China is rapidly setting up systems to allow offshore yuan trading and news that plans are underway for a centre in Sydney sparked a round of USD selling. Month-end flows and worries about the weekend may have also been factors. A large US desk was said to be buying AUD and EUR in size. EUR/USD chopped around 1.2470 but surged after Tokyo came on line, running to 1.2494 and then consolidating for several hours. A second, larger push emerged in the past hour, sparking a run through offers at 1.2510/20 to 1.2523. The overall trade can't be characterized as 'risk on' because proxies like EUR/JPY are relatively unchanged or lower. EUR/JPY touched a one-day low of 99.15 before rebounding. It was a one-way trading in USD/JPY, sinking through support at 79.50 to as low as 79.33. AUD/USD is at the highest levels in a week. Most of the gains came early in the session on the rumored US buying, climbing to 1.0115, chomping through offers at 1.0100. Kiwi kept pace in the early going but the soft business confidence numbers undermined the rally.
Hong Kong press: China and Australia discussing direct FX trading Japan May retail sales +3.6 y/y vs +2.9% y/y exp Fed's Lockhart: Conditions don't call for stronger Fed action UK to hand over 1.3B pound to EIB Former MPC member Goodhart: July bond buying "fairly odds on" Australia HIA home sales +0.7% m/m NZ business confidence hits 15-month low Australian job vacancies down 5.3% in May quarter Nikkei +1.2%, possibility of breaking 5-week high King Dollar took a thumping in Asia-Pacific trading. China is rapidly setting up systems to allow offshore yuan trading and news that plans are underway for a centre in Sydney sparked a round of USD selling. Month-end flows and worries about the weekend may have also been factors. A large US desk was said to be buying AUD and EUR in size. EUR/USD chopped around 1.2470 but surged after Tokyo came on line, running to 1.2494 and then consolidating for several hours. A second, larger push emerged in the past hour, sparking a run through offers at 1.2510/20 to 1.2523. The overall trade can't be characterized as 'risk on' because proxies like EUR/JPY are relatively unchanged or lower. EUR/JPY touched a one-day low of 99.15 before rebounding. It was a one-way trading in USD/JPY, sinking through support at 79.50 to as low as 79.33. AUD/USD is at the highest levels in a week. Most of the gains came early in the session on the rumored US buying, climbing to 1.0115, chomping through offers at 1.0100. Kiwi kept pace in the early going but the soft business confidence numbers undermined the rally.
