Highlights August 25, 2021 / 04:31 am UTC

Asia Summary and Highlights - 25 August 2021

By Charu Chanana

USD gained ground amid rising UST yields and sustained Delta risks.

Asia Session

The USD returned to its uptrend in the Asian session on Wednesday, and the rising UST yields suggest there is unlikely to be a dovish surprise from the Jackson Hole this week. Asian stocks lost steam after two days of advances.

EUR/USD lost ground to drop back below 1.1740 from overnight highs of 1.1765. USD/JPY rose to 109.87 from overnight lows of 109.41, although eased back to 109.80 at last look.

Commodity currencies declined as the spread of the delta coronavirus variant clouded global growth outlook. Australia reported a new high for daily cases in NSW and Japan is likely to expand its state of emergency to eight additional prefectures. AUD/USD seen back closer to 0.7240 after touching 0.7271 in the NY session. NZD/USD at 0.6940 from 0.6966. 

Australia reported a substantial miss on construction work in Q2 which will weigh on Q2 GDP growth due next week (Sept 1).

Chinese state media reported earlier that Ningbo, world's third-largest container port, to reopen closed terminal today. That should help restore supply chains and check global inflationary pressures, and is mildly positive for AUD.

U.S. Session

The USD continued to soften through the US session on Tuesday. EUR/USD pressed above 1.1750, USD/CAD below 1.26 and AUD/USD above 0.7250 to the lowest USD levels for a week, helped by strength in commodities, while equity markets were fairly steady. USD/JPY dipped early in the session, but recovered by the equity market open and only fell modestly thereafter. 

US data may have helped the USD decline with the Richmond Fed manufacturing index falling sharply in August to its lowest since June 2020, though the services index fell only modestly. US new home sales were slightly on the high side of expectations at 708k in July.


01:30 GMT - AU: Construction Work Done (2Q) 0.8%A (Mkt: 2.8% Prev: 2.4%)

Still to Come

05:00 GMT - JP: Leading indicator (Jun F) (Prev: 104.1)

08:00 GMT - DE: IFO Current Conditions (Aug) (Mkt: 100.8 Prev: 100.4)

08:00 GMT - DE: IFO Business Climate (Aug) (Mkt: 100.4 Prev: 100.8)

08:00 GMT - DE: IFO Expectations (Aug) (Mkt: 100 Prev: 101.2)

12:30 GMT - US: Durable Goods Orders (Jul P) 4cast: -1.5% (Mkt: -0.3% Prev: 0.9%)

12:30 GMT - US: Durables Ex Transportation (Jul P) 4cast: 0.5% (Mkt: 0.5% Prev: 0.5%)

14:30 GMT - US: DOE U.S. crude oil inventory (Aug 20) (Mkt: -2000K Prev: -3233K)


No Significant Events

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I, Charu Chanana, the lead analyst declare that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further declare that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.