INSIDE ASIA: Won Leads FX Decline as Investors Buy Haven Assets
(Bloomberg) -- Most Asian currencies drop, led by South Korea’s won, as investors buy the yen and other haven assets ahead of U.S. payroll data.
- Asian currencies had rallied in the past week on expectations that the Fed will refrain from a rate hike and other central banks such as BOJ will ease post Brexit, says Masakatsu Fukaya, trader in the Asia and emerging-market team at Mizuho Bank
- Investors are adjusting their positions after the rally before U.S. non-farm payroll data on Friday, he says
- Australian dollar falls on weaker-than-expected trade balance and retail data; bond yields decline to record low
- Reserve Bank of Australia expected to announce monetary policy at 12:30 HK time
- Overnight index swaps signal only 14% chance that RBA will cut rate from 1.75%; all economists surveyed by Bloomberg expect the central bank to stay on hold
- Yen gains 0.5% amid risk-off sentiment, with MSCI Asia Pacific Index down for the first day in five; Brent oil prices falls
- USD/JPY falls amid thin liquidity while Nikkei 225 slides as demand for risk assets post-Brexit seems to be done for now, according to Societe Generale
- 10-year JGB auction due at 11:45am HK Time
- Dollar index is little changed
- Yuan falls after China cuts the onshore reference rate to lowest since Dec. 2010, cutting it by 0.2% to 6.6594/USD
- USD/CNH buying by banks, funds and intraday accounts was seen after the fixing, according to FX traders in North Asia
- China is more likely to fine-tune monetary policy in 2H with targeted RRR cuts or possibly across-the-board cuts if needed, China Securities Journal commentary says
- RBS sees another 5% to 10% depreciation in CNY/USD on capital outflows
- Caixin China June Services PMI 52.7 vs 51.2 in May; Caixin China June Composite PMI 50.3 vs 50.5 in May
- Taiwan dollar dips, while 10-year yield drops to record low
- Taiwan said to cut overnight guiding rate to 0.179% from 0.18%
- South Korea’s won falls for second day, with the Kospi stock index also declining
- South Korea will shortly release plans to improve investments in new business areas including pet products as well create new export items like cosmetics, says finance minister
- Philippine peso set to snap two-day gain; June consumer prices rise 1.9% y/y, meeting expectations
- Higher inflation in June consistent with central bank’s assessment that “over the policy horizon, monthly inflation will move to within target,” Bangko Sentral ng Pilipinas Governor Tetangco says
- New Zealand dollar drops for the first time in six days
- NZIER business survey shows ‘decent momentum’ in economy; 2Q business confidence index rises to 19 from 2 in 1Q
- N.Z. 11-month budget surplus exceeds forecast on tax revenue
- NOTE: Holiday in Singapore and India on July 6, Indonesia markets closed July 4 to 8, Malaysia on July 6 & 7
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers 40005Z AU (Reserve Bank of Australia)
People Amando Tetangco (Bangko Sentral ng Pilipinas)
Masakatsu Fukaya (Mizuho Financial Group Inc)
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