Asia markets calm, dollar dips lower

Wall Street sideways shuffle continues in Asia

Wall Street endured another sideways session overnight, as the Masters of the Universe digested lower than expected US inflation numbers. The S&P 500 edged 0.03% lower; the Nasdaq lost 0.25%, but the Dow Jones rose 0.20% as some residual cyclical rotation persisted.

It will likely be an uneventful day throughout Asia, with the celebration of the Lunar New Year holidays. Japan has a national holiday, and China, ex Hong Kong, South Korea, Vietnam and Taiwan are all closed today. Tomorrow most of the rest of Asia joins them, although the ever-diligent Japanese will be back at their desks. With much lower than average liquidity, headline-driven volatility spikes are the only thing likely to awaken Asian markets from their slumber.

Those markets that are open today in Asia are mostly gently lower, as investors take some exposure of the books into the Lunar New Year break. The Hang Seng has fallen 0.40%, with Singapore 0.15% lower while Jakarta is 0.20% higher with Kuala Lumpur and Bangkok gaining 0.10%. In Australia, the day is mixed. The All Ordinaries have eased 0.15%, whiles the ASX 200 is unchanged.

There were no fireworks between the US and China, as Presidents Biden and Xi had a cordial telephone conversation. With most major markets closed in Asia, European stocks are likely to continue the sideways shuffle, awaiting North America’s arrival.


The US dollar edges lower

Currency markets had a non-descript session, content to digest this week’s fall by the US dollar. US yields eased after the US inflation data and that pushed the greenback slightly lower, the dollar index finishing almost unchanged at 90.43. EUR/USD and USD/JPY were hardly changed, and the AUD/USD continues to flirt with the top of its symmetrical triangle, hinting that further gains next week lie ahead.

Asian currencies remain firm into the holidays with the PBOC intent on keeping USD/CNY in a 6.4000/6.5000 range over the one-week break. Until USD/CNY breaks that range one way or another, Asian currency markets will content themselves by orbiting near the Yuan’s event horizon. To put it more succinctly, bring a good book.

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.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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