Asia Summary and Highlights 30 Apr
US CENTCOM to brief Trump Thursday on Iran military options including infrastructure strike, Hormuz seizure and special forces uranium mission
Asia Session
USD/JPY broke through 160 on Wednesday and we are seeing a retest of the figure in early Asia. We haven't heard any verbal intervention yet as they are still likely in the holiday mood but it cannot be ruled out. If the rally continues and see the pair go up a figure or two in a short run, market participants should brace for actual intervention. USD/JPY is trading 0.07% higher at 160.54.
The broader risk mood remains heavy as headline crossed the wire suggesting Trump is being briefed his military options. While it will be costly, the possibility of renewed military operation cannot be ruled out on the lack of progress in negotiation. Major equity indexes are performing individually while precious metal regained some lost grounds. AUD/USD is trading 0.03% higher at 0.7118. NZD/USD is unchanged while USD/CAD slips 0.02%. Both Brent and WTI are trading higher yet off session high. Else, EUR/USD is down 0.12% and GBP/USD is down 0.07%.
European and North American sessions
With Middle East risk lifting oil prices, the USD was firmer ahead of the FOMC, gaining momentum in the North American morning. US trade, durable goods orders, housing starts and permits data were mixed but on balance solid. USD/JPY pushed above 160 and EUR/USD nudged below 1.17. EUR/JPY gains peaked near 187.50. AUD/USD was also weaker but a bounce in USD/CAD above 1.37 was erased through the BoC press conference, which left open the possibility of tightening if higher oil prices were sustained, after the BoC left rates unchanged and saw policy as appropriate if BoC assumptions on oil prices falling and tariff rates remaining unchanged held up. AUD/CAD slipped to .9750 from .98. Movements in EUR/GBP and EUR/CHF were marginal.
The FOMC left rates unchanged as expected but there were three hawkish dissents against an easing bias in additional to one dovish dissent calling for an ease. Powell at his press conference suggested the language could be shifted at a future meeting, as well as stating he would continue as Governor after his term as Chair ends. The FX reaction was modest, but the USD advanced further, EUR/USD falling to 1.1680 and USD/JPY near 160.40.