Asia Summary and Highlights 26 March

Asia Session

The Australian February monthly CPI came in at 2.4% y/y, staying within the target range. It would be supportive for more easing from the RBA but we are unlikely to see an imminent cut when trimmed mean remain at the upper bound of range. The RBA will likely based their policy around the middle of inflation target range, as per last policy statement. AUD/USD is up 0.09% to 0.6308, NZD/USD is up 0.2% to 0.5744 while USD/CAD is unchanged.

The February Japan Services Producer Price Index stays solid at +3% y/y, continue to point towards inflationary pressure. BoJ Governor Ueda came with the same rhetoric on more rate hikes and potential scenarios of not hiking. It is not the hawkish remark market participants are looking for and see JPY weakens on less prospect of an imminent hike. USD/JPY is trading 0.43% higher at 150.54. Else, EUR/USD is down 0.09% and GBP/USD 0.1%.

North American session

The USD extended European losses early in North America, most notably on USD/JPY which fell below 150.  Weak US consumer confidence data, falling to 92.9 in March from 100.1, reaching its lowest since January 2021, saw the USD move off its lows versus the commodity currencies, AUD/USD back to .63 from a high of .6325, while USD/CAD recovered to 1.43 from a low of 1.4271 before some late slippage after Trump said Mexico and Canada have stepped up.  

Trump was more critical of the EU, and EUR/USD slipped back to 1.08 from a high of 1.0830, continuing to underperform GBP/USD, as EUR/GBP fell below .8340. USD/JPY remained weaker, seeing a low of 149.55 but edged back towards 150 in late trade. US new home sales were close to consensus, up 1.8% in February to 676k, and overshadowed by the consumer confidence data.