HALISTER1: INSIDE ASIA: Won Leads Decline in Asia; Aussie Fall on Moody’s

INSIDE ASIA: Won Leads Decline in Asia; Aussie Fall on Moody’s

(Bloomberg) -- South Korea’s won led the decline in Asian currencies as Fed minutes and comments spur uncertainty. Aussie slides after Moody’s slapped a negative outlook on the nation’s banks.
  • Job growth to drive rate decision, not GDP, NY Fed Pres. William Dudley said. SF Fed Pres. John Williams, non-voter, said it makes sense to return to pace of gradual rate increases
    • Following Dudley’s hawkish comments this week, RBC says market awaits Yellen’s Jackson Hole appearance to see whether she adds credence to this recent Fed bluster
    • “There is a growing divide between Fed members and that is bringing a lot of uncertainty, which tends to see riskier assets not do so well,” says Stephen Innes, senior Asia Pacific FX trader at Oanda
    • Fed July minutes reveal a split btw officials on how to interpret slowdown in job growth
  • Aussie drops after Moody’s revised its outlook on five Australian banks to negative
    • Macro and hedge accounts have sold AUD/USD this morning citing the Moody’s revision, according to an Asia-based FX trader
  • Yen snaps five-day gain amid more verbal intervention from Japanese officials
    • Should USD/JPY decline to 95-96 before the BOJ’s monetary policy meeting on Sept. 20-21, govt likely to intervene, according to JPMorgan
    • June all industry est. at +0.9%, highest since Jan.
  • Yuan slips in both onshore and offshore markets
    • USD/CNH is bidding higher as shorts are profit-taking on USD amid thin liquidity, driving broader gains in the greenback: Sue Trinh, head of Asia FX Strategy at RBC Capital Markets
    • China is facing increasing pressure to ease monetary policy as domestic economic pressures are “relatively large” and as other countries lower interest rates, China Securities Journal commentary says
  • Won heads for biggest weekly decline in 6 weeks before release of Korea 2Q average monthly household income data
    • July PPI -2.4%, smallest decline since Jan. 2015
    • Koreans teeter on ‘rate cliff’ as personal lending jumps 13-fold
  • Southeast Asian currencies decline, led by ringgit
  • Rupiah slips before central bank’s monetary-policy decision
    • Indonesia’s central bank will cut its 7-day reverse repo rate to 5% from 5.25%, according to half of 22 economists surveyed by Bloomberg; rest expect no change
  • Taiwan 2Q GDP final est. +0.7% vs previous forecast +0.69%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
John Williams (Upland Resources Inc)
William Dudley (Federal Reserve Bank of New York)
Stephen Innes (OANDA Corp)

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