Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Asian FX lower as USD/JPY breaches 155
Asian FX markets were sharply lower on Thursday driven by another bout of weakness from the Japanese yen.
The USD/JPY moved above the 155.00 level for the first time since 1990 as the US dollar resumed its rally ahead of key US GDP and PCE inflation numbers due over the next 48 hours.
In other Asian markets, the USD/SGD gained further with the pair up 0.1% as the market remains near six-month highs.
The Chinese yuan saw the larger losses with the USD/CNH up 0.2% as the pair traded close to technical resistance at 7.30.
Chinese authorities are likely to push back on recent weakness as the USD/CNY reached this major technical level.
However, with the ongoing US dollar strength, and the People’s Bank of China likely to keep policy loose, the USD/CNH might eventually test levels above towards 7.40.
US PCE inflation key
More broadly, FX markets are likely to be driven by Friday night’s US inflation reading – potentially one of the most important economic releases of the year.
While the US’s consumer price index (CPI) has remained stuck around 3.5% so far this year, the personal consumption and expenditure (PCE) release, the Federal Reserve’s preferred measure of inflation, has been lower, around 2.5%.
Additionally, while US CPI numbers have mostly beaten expectations, US PCE has been mostly in line.
A higher PCE number could drive further USD strength, while a number in line or below could see the USD lower.
USDCNH nears six-month highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22 – 27 April
All times AEST
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
Have a question? [email protected]
