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FOREX: AUD & NZD Eyeing Weekly Lows, Underperforming Yen

FOREX
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The USD BBDXY index is a touch higher, last near 1258.3. Most weakness today has been focused in AUD and NZD. Yen is marginally higher, but is within Thursday ranges. 

  • The AUD and NZD weakness doesn't appear to have had a direct catalyst. Broader technical trends remain weaker for both currencies. AUD/USD is very close to key Sep lows, last near 0.6620. NZD/USD is last at 0.5990, challenging week to date lows.
  • Onshore China and HK equities are higher, up around 1% at this stage. Stimulus optimism and better housing data is aiding sentiment. Iron ore is higher, up 1.8%, but this is not benefiting the AUD so far.
  • USD/JPY has been somewhat volatile, but within recent ranges, we were last 151.70. We had fresh FX rhetoric from the Chief FX Diplomat, but yen strength was limited. The Tokyo CPI for Oct showed firmer core price trends relative to expectations. Services prices rose firmly in the month. However, with BoJ Governor Ueda hinting at no changes next week, this may be limiting the data's impact.
  • We also have the Japan lower house elections this weekend. Uncertainty rests over whether the ruling LDP will lose its outright majority. A broader coalition in Japan may temper the BoJ normalisation process, albeit at the margins.
  • Looking ahead, we have US durable goods orders and the U. Of Mich sentiment final read as the main data points. The Fed's Collins also speaks. 

 

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The USD BBDXY index is a touch higher, last near 1258.3. Most weakness today has been focused in AUD and NZD. Yen is marginally higher, but is within Thursday ranges. 

  • The AUD and NZD weakness doesn't appear to have had a direct catalyst. Broader technical trends remain weaker for both currencies. AUD/USD is very close to key Sep lows, last near 0.6620. NZD/USD is last at 0.5990, challenging week to date lows.
  • Onshore China and HK equities are higher, up around 1% at this stage. Stimulus optimism and better housing data is aiding sentiment. Iron ore is higher, up 1.8%, but this is not benefiting the AUD so far.
  • USD/JPY has been somewhat volatile, but within recent ranges, we were last 151.70. We had fresh FX rhetoric from the Chief FX Diplomat, but yen strength was limited. The Tokyo CPI for Oct showed firmer core price trends relative to expectations. Services prices rose firmly in the month. However, with BoJ Governor Ueda hinting at no changes next week, this may be limiting the data's impact.
  • We also have the Japan lower house elections this weekend. Uncertainty rests over whether the ruling LDP will lose its outright majority. A broader coalition in Japan may temper the BoJ normalisation process, albeit at the margins.
  • Looking ahead, we have US durable goods orders and the U. Of Mich sentiment final read as the main data points. The Fed's Collins also speaks.