Asia Summary and Highlights 18 Sep
Headline Australian employment change misses but unemployment rate steady
Kiwi sunk on dismay Q2 GDP
Asia Session
The Australia August headline employment change is a miss of 5.4k contraction but unemployment rate remain steady at 4.2%. Part time employment also increased more than full time jobs. However, one bad report does not mean a weak Australian labor market, especially with unemployment rate steady. AUD/USD is trading 0.32% lower at 0.6630, NZD/USD slumped by 085% to 0.5913 after the dismay Q2 GDP data that came in at -0.9% q/q and -0.6% y/y, driving speculation of more cut from the RBNZ while USD/CAD rises 0.09%.
As market participants digest the overnight FOMC decision, USD is trading broadly higher on Thursday's Asia session. U.S. Treasury yields are retracing partial post FOMC gains while JGB yields are playing catch up. USD/JPY is trading 0.17% higher at 147.19. Else, EUR/USD is down 0.14% and GBP/USD is down 0.12%.
North American session
Ahead of the FOMC the USD was softened, with GBP/USD in particular firmer rising to 1.3560 from 1.3645 while EUR/USD reversed its earlier losses. USD/CAD however saw very marginal gains after the BoC eased by 25bps as expected, with a dovish leaning statement.
The FOMC eased by 25bps as expected but the dots looked for two further moves in 2026 rather than the expected one and the USD slipped, even with only 25bps more being seen in both 2026 and 2027 and the adjustments to the statement being mixed rather than dovish. USD/JPY fell to 145.50 and EUR/USD rallied above 1.19. However, the move was reversed during Powell’s press conference, with USD/JPY ending firmer near 146.80 and EUR/USD lower near 1.1825. Other pairs saw similar moves.