Asia Summary and Highlights 21 October
PBoC cut 1 and 5 yr LPR by 25bps
RBA deputy governor said policy ready for both direction
Asia Session
RBA deputy governor says he is being surprised by strong employment growth and monetary policy is ready to respond in either direction. It seems to further push back market participants expectation of a rate cut and supports the Aussie. The PBoC also cut 1 and 5yr LPR by 25bps as widely expected and supported the Chinese equities. AUD/usd is trading 0.15% higher at 0.6716, NZD/USD is also trading 0.16% higher at 0.6081 while USD/CAD is up 0.07%.
The USD/JPY kickstart the week on a choppy note. There were verbal intervention when the pair rose above 150 and seems to have kept the pair in check along with USD softening. USD/JPY rose to 149.63 in early Asia before reversing to 149.25 currently. Else, EUR/USD and GBP/USD are unchanged.
North American session
US housing starts were near consensus with a 0.5% decline to 1354k but permits were weaker than expected falling by 2.9% to 1428k. This saw the USD slip versus JPY and EUR with losses extending later in the session, USD/JPY falling to 149.50 from 150, and EUR/USD rising to 1.0865 from 1.0850. With GBP/USD more stable EUR/GBP fully reversed European losses rising to .8330. While the USD was generally softer with oil slipping the USD edged higher versus the commodity currencies, USD/CAD moving above 1.38 and AUD/USD falling to .67.