Asia roundup: Aussie gains on RBA meeting minutes, greenback rallies as U.S. treasury yields rise, Asian shares surge - Tuesday, August 20th, 2019
Source: FxWire Pro - Media Round Ups / 20 Aug 2019 08:15:24 Europe/London
- Dollar near three-week peak as Treasury yields rise
- Oil rises 2% after an attack on Saudi field
- Gold sheds 1% as risk appetite recovers
Economic Data Ahead
- (0500 ET/0900 GMT) EZ construction output s.a MoM June
- (0500 ET/0900 GMT) EZ construction output w.d.a YoY June
- (0600 ET/1000 GMT) UK CBI industrial trends survey-orders MoM August
Key Events Ahead
- No significant events scheduled
DXY: The dollar index surged to a 2-1/2 week peak as yields on benchmark U.S. Treasuries pulled away from 3-year lows, boosted by prospect of Germany embarking on stimulus and on more economic support measures by China. The greenback against a basket of currencies traded flat at 98.38, having touched a high of 98.39 on Monday, its highest since August 2.
EUR/USD: The euro edged higher, halting a 5-day losing streak, but still held close to a 2-week trough set last week on lingering concerns over political developments in Italy. The European currency traded flat at 1.1082, having touched a low of 1.1066 on Friday, its lowest since August 1. Investors’ attention will remain on Eurozone construction output, ahead of Fed's Quarles' speech. Immediate resistance is located at 1.1105 (23.6% retracement of 1.1230 and 1.1066), a break above targets 1.1129 (38.2% retracement). On the downside, support is seen at 1.1060 (July 31 Low), a break below could drag it below 1.1026 (August 1 Low).
USD/JPY: The dollar eased after rising for three straight sessions, as investors turned cautious ahead of the U.S. Federal Reserve’s Jackson Hole symposium this week for greater clarity on the future path of interest rates. The major was trading 0.2 percent down at 106.47, having hit a low of 105.05 last week, its lowest since Jan 3. Investors’ will continue to track the broad-based market sentiment, ahead of Fed's Quarles' speech. Immediate resistance is located at 107.09 (21-DMA), a break above targets 107.56 (August 2 High). On the downside, support is seen at 105.89 (August 8 Low), a break below could take it lower at 105.29 (Aug. 9 Low).
GBP/USD: Sterling declined, extending previous session losses, as investors cautiously awaited Prime Minister Boris Johnson's meeting with French President Emmanuel Macron and German Chancellor Angela Merkel this week ahead of a G7 summit on Aug. 24-26 in Biarritz, France. The major traded 0.1 percent down at 1.2112, having hit a low of 1.2014 last week, it’s lowest since Jan. 2017. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2210 (38.2% retracement of 1.2522 and 1.2079), a break above could take it near 1.2331 (61.8% retracement). On the downside, support is seen at 1.2091 (5-DMA), a break below targets 1.2041 (August 13, Low). Against the euro, the pound was trading 0.1 percent down at 91.45 pence, having hit a high of 90.90 on Friday, it’s highest since July 31.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses, after minutes of the Reserve Bank of Australia's August meeting suggested the central bank wasn't in a rush to cut rates again. The Aussie trades 0.3 percent up at 0.6795, having hit a low of 0.6677 earlier in the month, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6735 (August 13 Low), a break below targets 0.6700. On the upside, resistance is located at 6831 (38.2% retracement of 0.7082 and 0.6677), a break above could take it near 0.6879 (50% retracement).
NZD/USD: The New Zealand dollar rose after tumbling to a near 2-week low earlier in the session, as expectations policymakers around the world would unleash fresh stimulus drove an improvement in appetite for riskier assets. The Kiwi trades 0.2 percent up at 0.6416, having touched a low of 0.6403 earlier, its lowest level August 7. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6534 (38.2% retracement of 0.6790 and 0.6376), a break above could take it near 0.6583 (50% retracement). On the downside, support is seen at 0.6400, a break below could drag it below 0.6365.
Asian shares rallied as hopes for stimulus in major economies offset anxiety about a global recession.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei surged 0.6 percent to 20,677.22 points, Australia's S&P/ASX 200 index rallied 1.2 percent to 6,545.00 points and South Korea's KOSPI gained 1.1 percent to 1,961.49 points.
Shanghai composite index fell 0.2 percent to 2,878.33 points, while CSI 300 index traded 0.2 percent down at 3,785.35 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 26,267.05 points. Taiwan shares added 0.3 percent to 10,522.50 points.
Crude oil prices surged to a 6-day peak after rising by 2 percent in the previous session on optimism that U.S.-China trade tensions would ease. International benchmark Brent crude was trading higher at $59.77 per barrel by 0509 GMT, having hit a high of $59.90 earlier, its highest since August 14. U.S. West Texas Intermediate was trading up at $56.16 a barrel, after rising as high as $56.37 on Monday, its highest since August 14.
Gold prices declined to a 1-week low after falling by more than 1 percent in the prior session as concerns eased that major economies could tip into recession. Spot gold was trading 0.05 percent down at $1,496.01 per ounce by 0542 GMT, having touched a low of $1,492.74 earlier, its lowest since August 13. U.S. gold futures fell 0.7 percent to $1,512.30.
Japanese government bond yields edged higher across the curve on expectations for fresh stimulus measures in major economies. The benchmark 10-year JGB yield added half a basis point to minus 0.230 percent, while the 20-year and the 30-year yields rose one basis point each to 0.105 percent and 0.210 percent, respectively. The 10-year JGB futures dropped 0.02 point to 154.83.
The Australian government bonds suffered during Asian session of the second trading day of the week following investors’ improved appetite after global recession fears eased, tracking hopes of stimuli from major economies like China and Germany to support the ailing economies. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 0.952 percent, the yield on the long-term 30-year bond surged 3 basis points to 1.542 percent while the yield on short-term 2-year traded steady at 0.751 percent.© FxWire Pro 2019. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.
- Dollar near three-week peak as Treasury yields rise