Low Conviction Session In Asia

Headline flow was few and far between in Asia, keeping G10 FX rangebound, with participants awaiting further clarity on U.S. fiscal matters and global restriction tightening. The Antipodeans landed at the bottom of the pile, with simmering Sino-Australian trade tensions eyed.

• AUD/USD blipped higher in early trade, but more than erased gains and last sits down 25 pips at $0.7510. The decline in NZD/USD was shallower, the rate last trades down 7 pips at $0.7074. AUD/NZD retreated after failing to punch through its 200-DMA over the past two days. RBA December meeting minutes release was broadly in line with market expectations.
• JPY crosses were bought into the Tokyo fix, possibly on the back of Gotobi day demand. USD/JPY extended gains thereafter, but AUD/JPY retreated into negative territory.
• The PBOC fixed the USD/CNY mid-point at 6.5434, 73pips weaker than Monday, and injected CNY950bn at an unchanged rate of 2.95%, more than offsetting the CNY 300bn of MLF loans that mature tomorrow (Dec 16) and the CNY 300bn that rolled off on Dec 7. USD/CNH extended gains after the cash injection. Chinese economic activity indicators fell in line with expectations.
• The greenback generally outperformed Asian EM FX. KRW, IDR & MYR were the main laggards in the region.
• Focus turns to UK labour mkt report, final French & Italian CPIs, U.S. industrial output & Empire M'fing, Canadian housing starts as well as comments from ECB's Rehn & BoC's Macklem.