Yen Falls as Aussie Dollar Gains in Risk-On Trade, NZ Dollar Lags
DailyFX.com -
Talking Points:
- Japanese Yen falls, Aussie Dollar gains as stocks rise in Asian trade
- NZ Dollar lags as FinMin English stokes RBNZ rate cut speculation
- S&P 500 futures suggest risk appetite recovery to see follow-through
The Yen underperformed in overnight trade as Japan's benchmark Nikkei 225 stock index advanced, sapping demand for the anti-risk currency. The risk-on mood bolstered the sentiment-sensitive Australian Dollar , which tracked upward alongside share prices.
The New Zealand Dollar failed to capitalize however, trading downward parallel with a decline in the island nation's bond yields that hinted at building RBNZ rate cut speculation. Traders now price in a 76 percent probability of a 25 basis point cut at next month's policy meeting.
The dovish shift in the outlook may have been triggered by comments by New Zealand Finance Minister Bill English, who said the central bank has the "tool kit" to address the to address the buoyant Auckland housing market and has consistently signaled its intent to take the issue seriously.
This may have implied that the RBNZ will continue to use macro-prudential tools to cool property prices, implying frothy conditions there will not derail plans to reduce the baseline cash rate. English also alluded that the RBNZ may present its strategy in the Financial Stability Report due for release tomorrow.
Looking ahead, a quiet economic calendar is likely to put risk sentiment trends in the spotlight. S &P 500 futures are pointing decidedly higher, hinting that the risk-on mood seen overnight is likely to carry forward. This bodes well for commodity-bloc FX and may continue to punish anti-risk alternatives, notably the Yen.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:00
NZD
ANZ Truckometer Heavy (MoM) (APR)
-2.4%
-
3.3%
22:00
USD
Fed's Williams Participates in Online Q&A
-
-
-
22:45
NZD
Card Spending Retail (MoM) (APR)
0.9%
0.5%
0.1%
22:45
NZD
Card Spending Total (MoM) (APR)
1.5%
-
0.5%
23:01
GBP
BRC Sales Like-For-Like (YoY) (APR)
-0.9%
0.5%
-0.7%
23:30
AUD
Weekly Consumer Confidence Index (MAY 8)
113.9
-
113.9
01:30
CNY
CPI (YoY) (APR)
2.3%
2.3%
2.3%
01:30
CNY
PPI (YoY) (APR)
-3.4%
-3.7%
-4.3%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
05:45
CHF
Unemployment Rate (APR)
3.5% (A)
3.6%
Medium
05:45
CHF
Unemployment Rate SA (APR)
3.5% (A)
3.4%
Medium
06:00
EUR
German Industrial Production (MoM) (MAR)
-1.3% (A)
-0.7%
Medium
06:00
EUR
German Industrial Production (YoY) (MAR)
0.3% (A)
2.0%
Medium
06:00
EUR
German Trade Balance (MAR)
26.0b (A)
20.2b
Medium
06:00
EUR
German Current Account Balance (MAR)
30.4b (A)
21.1b
Low
06:00
EUR
German Exports SA (MoM) (MAR)
1.9% (A)
1.3%
Low
06:00
EUR
German Imports SA (MoM) (MAR)
-2.3% (A)
0.1%
Low
07:15
USD
Fed's Dudley Speaks in Zurich
-
-
Medium
08:30
GBP
Visible Trade Balance (£, Mn) (MAR)
-11450
-11964
Medium
08:30
GBP
Trade Balance Non EU (£, Mn) (MAR)
-3600
-3357
Low
08:30
GBP
Trade Balance (£, Mn) (MAR)
-4200
-4840
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.1305
1.1349
1.1366
1.1393
1.1410
1.1437
1.1481
GBP/USD
1.4211
1.4316
1.4361
1.4421
1.4466
1.4526
1.4631
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
