OANDA Trading Asia market closing note:Lots of inflexion but a lack of direction

Lots of inflexion but a lack of direction

A day of inflexion in currency markets but we ended up with little direction.

Most of today was spent trying to find a reason, but with the USD looking battle worn and genuinely fatigued, dollar bulls are talking to the sidelines. While the US treasury yields approached the highest level for the year, the USD remains meek. But if the dollar cannot get a bump from higher US yields, where do we go??



New Zealand’s Q2 GDP surprised the street and printed 1% (0.8% expected). NZDUSD reacted from 0.6600 to 0.6650. Again proving you can never keep a good ” kiwi” down. But, another gut check for dollar bulls, who are falling by the wayside one by one.

Kiwi jumps on strongest growth in two years.


As London picks up the pace, the Euro finds itself back at that familiar 1.1700 teeter-totter level. Indeed, battle lines are getting drawn ahead of next week Fed meeting.

Asia FX

Everyone is dipping into the magic book of tricks to tame the effect of US tariffs and the strong USD

USDINR NDF fell abruptly this afternoon on wire reports suggesting RBI is studying the efficacy of taking oil companies USD demand away from the market. The state-run oil companies were now sourcing their entire dollar demand in markets, and the RBI is now considering opening a swap window to alleviate the pressure, something they have baulked at in the past.
Indeed, desperate times lead to drastic measures.

Mainland authorities are reportedly cutting import tax from most of its trading partners as soon as next month. Of course, the breadth and the actual tax % will be the key. Current estimates are the tax cut will be applied to around 1,500 consumer products.

Oil Markets

Oil prices continued to firm throughout the day as the drop in US inventories coupled with the rise in exports suggests demand is robust.

Traders are banking on $80 Brent not being a near-term cap and have turned their targets higher. All supported by Saudi comments earlier in the week suggest that they are tolerant  to prices moving above that level

Iran sanction continues to provide the underbelly of support for oil prices.

The ducks are aligning for a push higher suggesting the ” “The bulls are back in charge,”

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