Asia Summary and Highlights 31 Dec
The USD is broadly higher
Asia Session
Kiwi led with losses as regional sentiment sours on the last Asia trading session for 2025. It is reported that China will ease property taxes but avoids bold housing stimulus by extending a policy waiving value-added tax on selected home sales. In a somewhat slow market, we are seeing the NZD/USD led with a 0.41% losses to 0.5769, AUD/USD is also trading 0.14% lower while USD/CAD rises 0.05% as metals fall further.
The USD is trading broadly higher on the last 2025 trading day. The bond market is already in holiday mood and see little movement. USD/JPY is trading 0.17% higher at 156.60. Else, EUR/USD and GBP/USD are both down 0.11%.
N America Session
Before the FOMC minutes release the USD edged up and then saw little reaction on the minutes. FX traders were watch 2yr Treasury and only a 1bps decline was seen. The December minutes leave the impression that the bias is towards more cuts in 2026, but likely after a policy hold in the near-term. However, this is already discounted in money market futures and attention now switched to the December numbers, with payrolls on January 9.
President Donald Trump comments yesterday also attracting some attention. The optimism on a near-term Ukraine peace deal is not being shared by the market, with Russia and Ukraine still far apart of territory and the issue of security guarantees. Any surprise peace deal could help European gas prices lower, which would help a European recovery and the EUR.
AUD drifted lower in the U.S. to reverse gains seen in Asia. AUD remains one of the favourite picks for 2026, given the RBA could hike as the Fed cuts. Additionally, attitude towards China and its assets are becoming less negative, while the AUD has lagged other majors in 2025.