APAC currency wrap

G-10

Euro and Yen are steering the ship 

G-10 traders remain painstakingly focused on both EUR and JPY after  ECB  and BOJ  jawboning has tempered the bearish dollar sentiment in Asia today.  While the greenback trades a tad firmer, sloppy and choppy markets look set to continue in early London trade.

Australian Dollar 

Much of this mornings excitement centred around the Australian Jobs print which saw the Aussie break 80 level. But given the volatility around this series, it does little to move the RBA dial and the Aussie quickly retraced.

China  Data 

This afternoons China data dump delivered a convincing package if you can overlook the Retail sales miss. And while a bit perplexing, there is no denying the power of the Chinese consumer, and with the powerful forces of commercialism griping mainland consumers, China is primed to surpass the US as the world’s most prominent retail spender.Certainly, 2018 should bode well at Beijing check out counters.

Asian currencies trade with a weaker bias. most of the session

Malaysian Ringgit

While the USDMYR initially traded higher on the back of rising US Treasury yields as the ensuing stronger US dollar momentum triggered some short covering in early trade. The local unit was more than up for the challenge.

And while higher US bond yields could present some headwinds for the MYR, surging global equity markets and higher energy prices more than offset the pressure from US interest rates, and the local traders started to re-engage short USDMYR positions once the USD correction ran out of steam.

Today’s subtle market moves suggest Investors will continue to take advantage of any opportunistic retreat on USDMYR, as bullish momentum remains intact.

We’re keeping a very close eye on both EURUSD and USDJPY as both pairs are driving the broader USD market sentiment.And given today’s sturdy price action on the Ringgit, at the first sign of US dollar weakness, we could see the Ringgit dive below the
technically significant 6.95 USDMYR level sooner rather than later.
Korean Won

The Monetary Policy Board (MPB) unanimously held the policy rate, 7-day repo rate, unchanged until the next meeting on 27th Feb in line with consensus.From the positive side of a stronger currency by extension, it tightens monetary conditions while buttressing inflation pressures allow the central bank to keep financial conditions accommodative. There’s a balancing act when it comes to monetary policy as the CB can choose to tighten financial conditions through a stronger currency or higher interest rates. But to prevent economic imbalances from the stronger Won, the BoK tacked dovish but left the door wide open for further rate hikes down the road.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes