USD/JPY Rises On Risk Aversion, Ignoring Economic Data

Risk aversion from the North American and European sessions is driving the Japanese currency higher on Friday, ignoring some upbeat economic data.

During the North American session, the S&P 500 fell as low as 1,078, its weakest level since early November 2009, and putting the index below its 100-day moving average for the first time since last April. Ultimately the index finished the day at 1,085, though, 1.2% lower on the day.

The only respite came after an upbeat unemployment from Japan. According to local authorities, the country’s unemployment rate fell to 5.1% in December, contrary to calls for an increase to 5.3% from 5.2% the month prior.

Meanwhile the job-to-applicant ratio advanced to 0.46 from 0.45, as expected.

USD/JPY surged 12 pips to 89.80 off an intraday low of 89.689 reached just moments before the announcement.

Released simultaneously, but ignored by the markets, headline national CPI declined by 1.7% year-over-year in December, in line with expectations, but slower than November’s 1.9% pullback. Meanwhile consumer prices excluding fresh food fell by 1.3%, also in line and slower than the prior month’s 1.7% pullback. Excluding fresh food and energy, prices were down 1.3%, just a tad faster than calls for a 1.1% contraction and the previous 1.0% fall.

Also released were the Tokyo CPI statistics for January. Headline inflation was down 2.1% on the year, in line with forecasts and slower than the prior 2.2% shortfall. Excluding fresh food, CPI fell by 2.0%, faster than projections for a 1.8% contraction and prior 1.9% fall. CPI excluding fresh food and energy was down 1.4%, in line with forecasts and slower than the previous month’s 1.5% slide.

The bottom line is that with deflation firmly entrenched in Japan and interest rates very low, it is very hard to trade any of the inflation data until they return to normal.

Just minutes later, preliminary Japanese industrial production grew 2.2% month-over-month, short of forecasts for a 2.5% increase in January and slower than the revised 2.2% gain. Before to revisions, November’s increase was of 2.2%.

In annual terms, production rose 5.3%, short of expectations for a 5.7% pickup, but rebounding from November’s 4.2% contraction, and therefore ending a 14-month losing streak.

Again, the Japanese currency continued to press against the greenback.

So far today, the pair has traded in a range of 89.59 to 90.05. Short term support lies at 88.97 followed by 88.58. Resistance lies at 90.55 followed by 91.88.

Yen Broadly Ignores Weak Retail Data

The Japanese currency moved negligibly higher after retail sales unexpectedly declined further than expectations in December.

Sales were down 1.2% month-over-month despite calls for a 0.2% contraction and after a 0.2% shortfall in November. Annual sales, meanwhile, fell by 0.3% contrary to calls for a 0.3% increase. In November, sales were down 1.0%.

On the flip side large retailers did better than projected with annual sales down 4.6% year-over-year, slower than calls for a 7.3% pullback and prior 9.6% contraction.

The yen failed to show any meaningful reaction to the data after heading lower in the aftermath of what was a relatively hawkish interest rate decision from the FOMC earlier in the day.

In the immediate aftermath of the retail data, USD/JPY fell by a mere five pips to 89.95 after trading in a range of 89.97 to 90.05 throughout the day. There is support at 89.14 with resistance at 90.09.

AUD

AUD Surges After CPI Comes In Just a Bit Faster Than Forecast

Australian dollar is surging against the USD, in the aftermath of a slightly stronger than expected CPI report.

According to the Australian Bureau of statistics, headline CPI was up 0.5% quarter-over-quarter, just faster than expectations for a 0.4% increase and slower than Q3’s 1.0% pickup.

Meanwhile, annual CPI advanced by 2.1%, just above calls for a 2.0% increase and prior 1.3% gain.

Details of the report were relatively in line, with the RBA’s trimmed mean CPI up 0.6% on the quarter, slower than Q3’s 0.8% pickup, and the weighted median up 0.7%, slower than the prior 0.8% rise.

The results in theory add credence to the view that the Reserve Bank of Australia will hike interest rates at next week’s interest rate decision, a development which most economists expect.

Nevertheless, after a weaker than expected PPI report released on Monday, market participants had only priced in a 67% chance of the hike occurring.

As a consequence, in the minutes following the announcement AUD/USD surged 26 pips to an intraday high of 0.9031. Support lies at 89.30 with resistance at 91.88 and 92.05.

Aussie PPI Falls in Q4

Aussie's better step it up....

The Australian dollar experience a brief sell off after the country’s producer price index turned out weaker than expected in Q4.

On quarterly basis, PPI declined by 0.4%, despite expectations for another 0.1% increase.

Meanwhile annual PPI contracted by 1.5%, further than forecasts for a 0.9% pullback and reversing a 0.2% increase in Q3.

The results suggest a downside bias in the Consumer Price Index to be released on Tuesday, a development which will weighed on the Australian Dollar.

The consensus is currently calling for a 0.4% quarterly gain to add to the prior 1.0% rise, and a 2.0% annual increase, faster than the previous 1.3% pickup.

In the immediate aftermath of the announcement, AUD/USD briefly declined 24 pips to 0.9023 before rebounding to pre-release levels.

The pair last traded higher by 61 pips at 0.9068 after trading in a range of 0.9015 to 0.9075 today. Short term support is at 0.8983 and 0.8939. Resistance is found at 0.9142 and 0.9155.

China Could Hike Interest Rates in April

Yikkessss!!!

With inflation higher than expected in yesterday's report, there is now talk that China could start raising interest rates as soon as April. Government officials are trying to cool the economy and have told several banks to stop lending. Weekly Chinese news magazine is reporting that BOCOM, Minsheng, China Merchants and Everbright are among the banks that have been told to halt loan originations. If China begins a swift interest rate hiking cycle, expect to see pressure on AUD, CAD and NZD.

AUD/USD Falls Abruptly Following Barrage of Chinese Data

Chinaaaaaa!!!

Chinese real GDP rose at a slightly faster pace in Q4 than economists were expecting, according to the Asian nation’s National Bureau of Statistics on Thursday (Wednesday evening EST). It rose 10.7% compared to the consensus call for a 10.5% rise to bolster the prior quarter’s revised 9.1% gain. Meanwhile, industrial production rose at an annualized 18.5% rate in December, below expectations for a 19.6% increase and the 19.2% rate in November. Retail sales, on the other hand, exceeded the consensus by rising 17.5% year-over-year in December compared to expectations for a 16.3% gain to bolster the previous month’s 15.8% rise. Chinese CPI rose an annualized 1.9% in December, a faster pace than the expected 1.4% rate and the previous 0.6% increase. Producer prices, on the other hand, increased 1.7% year-over-year in December, above calls for a 0.8% rise and following the 2.1% drop previously. Following the data, the AUD/USD instantly dropped 23 pips to $0.9101USD, before it rapidly returned to pre-release levels.

NZD/USD Sells Off as Kiwi Q4 CPI Falls Rather than Remains Flat on the Quarter

New Zealand!!!

Consumer prices in New Zealand declined 0.2% quarter-over-quarter in Q4, according to data issued by the country’s statistics bureau on Wednesday (Tuesday afternoon EST). The rise compared to economists’ expectations for a flat reading and followed the 1.3% gain in Q3. Meanwhile, consumer prices increased an annualized 2.0% in the final quarter of 2009, slightly below the consensus call for a 2.1% pace but above the previous 1.7% rise. Following the data, the Kiwi dollar declined by 31 pips to $0.7355USD.

Without Economic Data for Guidance, Yen Hits Four-Week High vs. USD

Ohhhh the yentels..lol

There are no Japanese indicators scheduled for release during the early part of Tuesday’s Asia-Pacific session. Indeed, the first release for the island nation won’t be launched upon markets until 11:00 p.m. EST on Monday night, when Japanese condominium sales for December will be released. In November, they increased an annualized 10.8%. Following that, at midnight EST, Japanese consumer confidence for December will be released. The month before, a 39.9 level was revealed. Despite the dearth of data for Japan, the yen recently strengthened to its best level against the greenback in four weeks. USD/JPY has slumped to 90.52, its worst rate versus Japan’s currency since Dec. 21, when it touched 90.16. Beyond that, support for the cross lies down at 88.97, hit on Dec. 18.

BOJ’s Shirakawa: Japanese Recovery to Continue but at Moderate Pace

Well at least there is some recovery.....

Japan’s economic recovery is expected to continue, though its pace is likely to remain moderate, Bank of Japan Governor Masaaki Shirakawa said on Monday (Sunday night EST). Speaking at the quarterly meeting of the central bank’s branch managers in Tokyo, he added that the Bank of Japan will maintain an extremely accommodative monetary policy. The decline in Japanese consumer prices will likely ease as the impact of crude oil prices slackens, according to Shirakawa. He also said that capital spending will stay flat in the short term. The yen’s reaction to the central banker’s comments was muted: USD/JPY rose 0.05 yen to 90.94, before returning to its level preceding Shirakawa’s speech.

USD/JPY Gains Quarter of a Yen Following Comments of Fed’s Plosser on Rate Hikes

Yea..Yea..Yea...yen, yen, yen!!!

Following Philadelphia Fed President Charles Plosser’s recent suggestion that the central bank should raise rates before unemployment falls to “acceptable” levels, the greenback strengthened moderately against the euro before slipping back. However, a more pronounced appreciation has been visible in USD/JPY: the greenback has slowly but steadily gained a net 0.25 yen to recently hit a new session high of 91.35. The move sees the U.S. dollar beginning to take back the losses it incurred versus Japan's currency on Jan. 12. Earlier in the day Mizuho currency experts had suggested that the Fed wouldn’t be raising rates in the near future, and this, they argued, made the yen more attractive to investors than the greenback. Obviously, Plosser’s comments imply an earlier-than-expected rate hike, although it should be emphasized that the central banker has no vote on the FOMC to implement his argument until 2011.

AUD/USD Soars to New One-Month High Following Aussie Trade & Retail Sales Data

Guess what i got more info on Aussy world...

Australia’s trade deficit shrank by more than economists expected in November, according to data released by the country’s statistics bureau on Thursday (Wednesday evening EST). The deficit fell to A$1700 million, a greater drop than the consensus call for it to fall to A$1800 from the revised A$2080 shortfall in October. Released simultaneously, Australia’s retail sales rose 1.4% on the month in November, overarching both expectations for a 0.3% increase and the revised 0.4% rise the month before. Following the data, the Aussie dollar rallied by 50 pips to a new session high against the greenback of $0.9267USD, before falling back slightly. The new intraday high is AUD/USD’s strongest level since Dec. 4, when it touched $0.9294USD. Resistance lies up at $0.9323USD, attained on Dec. 3.

CHINA

China's up to something....

The People's Bank of China has allowed 1-year bill rates to rise for the first time in 20 weeks. They sold them at a yield of 1.84%, up 8 basis points. Last week, the PBOC made a similar move with 3-month bills and it drew a great deal of attention because it's a sign that the government might be moving to cool down the economy by increasing borrowing rates. The rise is really a drop in the bucked but it's the second drop in two weeks and it will likely be seen as a sign of more to come. If China continues to raise rates it will cool the domestic economy and that will spill over to the rest of the world.

Fed's Bullard Says Markets Should Focus on Quantitative Easing

Ladies and Gents, Bullard is speaking his mind about the U.S. dollar....be prepared to hear what he has to say.....

St. Louis Fed President James Bullard (voter) had some comments today that have weighed on the U.S. dollar. Speaking in Shanghai, China, he said the market should focus on quantitative policy not interest rates. The market focus on interest rates is "disappointing", he said and added that that G7 rates may remain low for some time. In the future, he says monetary policy should put more weight on asset prices but that "better analysis" is needed on the asset price issue. He also said that the Fed's liquidityot" an inflationary concern. The comments are very dovish and are putting pressure on the USD and that should continue..

UD/USD Soars to New One-Month High Following Aussie Trade & Retail Sales Data

Hey everyone, I have found more great news about the Aussies...read on you Wallaby lovers...hehe

Australia’s trade deficit shrank by more than economists expected in November, according to data released by the country’s statistics bureau on Thursday (Wednesday evening EST). The deficit fell to A$1700 million, a greater drop than the consensus call for it to fall to A$1800 from the revised A$2080 shortfall in October. Released simultaneously, Australia’s retail sales rose 1.4% on the month in November, overarching both expectations for a 0.3% increase and the revised 0.4% rise the month before. Following the data, the Aussie dollar rallied by 50 pips to a new session high against the greenback of $0.9267USD, before falling back slightly. The new intraday high is AUD/USD’s strongest level since Dec. 4, when it touched $0.9294USD. Resistance lies up at $0.9323USD, attained on Dec. 3.

Moderate but Brief Rise in AUD/USD as Aussie Building Approvals Beat the Consensus in Nov.

Sine many of you liked the prior articles...I brought you new news about the Aussies and their Aussy dollars...hehe.

Building approvals in Australia rose more-than-expected in November, according to data released by the country’s bureau of statistics on Wednesday (Tuesday night EST). Approvals rose 5.9% month-over-month, overarching expectations for a 3.3% gain, and erasing their downwardly-revised 1.8% decline in October. Meanwhile, approvals rose 33.3% on the year, above calls for a 28.0% gain, and almost doubling the upwardly-revised 14.1% increase in October. Following the release, the Aussie dollar strengthened moderately, rising by as much as 12 pips to $0.9122USD, before quickly declining.