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FOREX: USD Firms As Hong Kong/China Property Equities Fall

FOREX
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The USD is up against all the G10 currencies in the first part of Thursday dealings. The BBDXY index was last near 1231, up around 0.15% versus end Wednesday levels. This is highs in the index back to the first half of September. A pull back in HK/China related equity sentiment has weighed on risk appetite, while Israel retaliation fears linger in the background (although oil prices have been very steady). 

  • USD/JPY was firmer in early trade, hitting fresh highs of 147.24, marginally above early Sep highs. Sentiment stabilized somewhat post the Tokyo fix, and as a Japanese government official stated new PM Ishiba didn't make a specific policy request to BoJ Ueda. This comes after yesterday's meeting and whereby the new PM stated that now is not the time for further BoJ rate rises (this weighed on yen in Wednesday trade).
  • This helped take USD/JPY a little lower, while BoJ board member Noguchi left the door for further rate hikes but there isn't a sense or urgency for a near term shift.
  • Yen got a further support as Hong Kong and China related equities gave back some of the recent surge (at the lunchtime break the HSI 300 is off 3.12%). Still, USD/JPY last tracks near 146.80/85, so still close to earlier highs. The yen hasn't meaningfully outperformed AUD and NZD either.
  • NZD/USD is back to the low 0.6240 region, off around 0.30% and sub its 20-day EMA. AUD/USD is off by close to the same amount, last near 0.6865, so close to this week's lows.
  • We had PMI revisions for Australia and Japan, along with Australian trade figures but these reports didn't shift the sentiment needle.
  • US equity futures sit lower, while US yields have ticked up a little 1bps.
  • Looking ahead, focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services. 
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The USD is up against all the G10 currencies in the first part of Thursday dealings. The BBDXY index was last near 1231, up around 0.15% versus end Wednesday levels. This is highs in the index back to the first half of September. A pull back in HK/China related equity sentiment has weighed on risk appetite, while Israel retaliation fears linger in the background (although oil prices have been very steady). 

  • USD/JPY was firmer in early trade, hitting fresh highs of 147.24, marginally above early Sep highs. Sentiment stabilized somewhat post the Tokyo fix, and as a Japanese government official stated new PM Ishiba didn't make a specific policy request to BoJ Ueda. This comes after yesterday's meeting and whereby the new PM stated that now is not the time for further BoJ rate rises (this weighed on yen in Wednesday trade).
  • This helped take USD/JPY a little lower, while BoJ board member Noguchi left the door for further rate hikes but there isn't a sense or urgency for a near term shift.
  • Yen got a further support as Hong Kong and China related equities gave back some of the recent surge (at the lunchtime break the HSI 300 is off 3.12%). Still, USD/JPY last tracks near 146.80/85, so still close to earlier highs. The yen hasn't meaningfully outperformed AUD and NZD either.
  • NZD/USD is back to the low 0.6240 region, off around 0.30% and sub its 20-day EMA. AUD/USD is off by close to the same amount, last near 0.6865, so close to this week's lows.
  • We had PMI revisions for Australia and Japan, along with Australian trade figures but these reports didn't shift the sentiment needle.
  • US equity futures sit lower, while US yields have ticked up a little 1bps.
  • Looking ahead, focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services.