FX Update: Asian update
Asia FX Update: The USD rediscovered a bid tone as oil and gold prices sank below Monday’s lows. Front month NYMEX crude prices ebbed back to the $112 area — over $3 down from Monday’s peak — as hurricane Fay missed production facilities in the Gulf of Mexico. EUR-USD tested towards the mid-1.46s while Cable breached below its 1.8625 Monday low and 1.8600. USD-JPY has been a relative underperformer as the yen has been firm amid the backdrop of continued equity market weakness, but the pair managed to recapture the 110.00 handle after making a two trading day low of 109.64. The AUD and NZD succumbed to some fresh selling.
The RBA August meeting minutes were consistent with a September rate cut, and while New Zealand Q2 PPI data surged, the figures do not alter the policy outlook, as the RBNZ has already demonstrated its willingness to look past strong Q2 inflation figures amid expectations that a slower economy will push inflation back.