Asia equities rise slightly, USD dips lower

Asia equities edge higher

Wall Street had a mixed session overnight, with the street falling into their happy place and buying tech and selling everything else, although the session was quiet. The S&P 500 edged 0.08% lower, while the Nasdaq rose by 0.49% and the Dow Jones fell by 0.37%. Clearly, Wall Street isn’t too concerned about the G-7 tax agreement and US big tech.

 

In Asia, Nasdaq and S&P 500 futures have moved higher again, greenlighting Asia to launch its day on a positive note. The Nikkei 225 has risen by 0.35%, with the Kospi edging 0.10% higher. China’s Shanghai Composite has risen 0.40%, the CSI 300 is flat, and Hong Kong is 0.50% higher.

 

Regionally, Singapore is down 0.15%, while Kuala Lumpur has climbed 0.50%, with Taipei falling 0.35% and Jakarta rising 0.10%. Australia’s All Ordinaries has risen 0.45%, while the ASX 200 is just 0.05% higher.

 

Barring a headline surprise, Asia looks content to follow Wall Street into wait-and-see mode ahead of inflation data later this week.

 

The US dollar drifts lower

The US dollar drifted lower overnight in a non-descript session, suggesting that the downside remains the path of least resistance for now for the greenback. The dollar index lost 0.18% to 89.98 overnight, creeping a few points higher to 90.00 in Asia today, in what looks to be a moribund session. The index remains in a broad 89.50 to 90.50 range, with a breakout indicating the US dollar’s next directional move.

 

Both EUR/USD and GBP/USD moved 20 points higher to 1.2185 and 1.4168, respectively. Ultimately, EUR/USD is bouncing around in a wider 1.2100 to 1.2250 range this past fortnight, while GBP/USD has clear support and resistance at 1.4100 and 1.4250. In the bigger picture, only failure of 1.2000 and 1.4000 respectively undermine the longer-term bullish outlook for both currencies.

 

Asian currencies are locked in neutral after the PBOC succeeded in putting a floor under yuan appreciation last week. USD/CNY at 6.3920 today, with the PBOC setting a neutral fixing today. Until the PBOC signals comfort at more yuan appreciation, the broader Asian grouping will likely mark time around these levels.

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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