A quiet NY session drifted into Asia and looked to be fairly slow moving at first. A FT newspaper article, (http://www.ft.com/intl/cms/s/0/0033bc70-86eb-11e0-92df-00144feabdc0.html#axzz1NPHz6zn3) helped Euro stay bid as it stated China would buy into the European bonds to be issued next month to help fund the Portuguese bailout. EURUSD started gaining momentum above 1.41 and chewed readily through offers on the way, hunting for stops above 1.4150. This helped the pro-risk environment, with stocks and commodities well bid and USD/Asia opening softer.
New then circulated that China’s wealth fund would invest 6bn NZD in New Zealand’s assets and government bonds. NZDUSD popped from around 0.8000 to 0.8030 instantly and continued to trade through stops on the way up. AUDNZD came under heavy pressure, triggering stops below 1.3150 on the way to reach 1.3115, with NZD up to 0.8074. (http://www.interest.co.nz/news/53615/chinas-giant-sovereign-wealth-fund-ready-spend-nz6-bln-nz-assets-and-government-bond)
USDCNY fixed lower at 6.4921, helping cap USD/Asia but with Euro already having triggered stops above 1.4150 to 1.4155 it had lesser effect. EURUSD still managed a second push to 1.4173 to finally clear the bulk of the remaining stops in the market before stalling and the session dwindling down. USD/Asia found a base, stocks capped the rally and EUR and AUD peeled slowly off their highs with little selling interest evident
Some selling emerged as headlines of explosions in China hit the wires, helping risk pairs off their highs, but failing to spark any proper sell off.
*RBA’S BATTELLINO SAYS CREDIT TO GROW IN `SINGLE-DIGIT’ RANGE
*BATTELLINO SAYS BUSINESS CREDIT GROWTH `LOW POINT’ MAY BE OVER
*BATTELLINO SEES CONSUMER BORROWING `SUBDUED’ FOR SOME TIME
*RBA’S BATTELLINO SAYS ~RBA AWARE AUSSIE DOLLAR STRENGTH HARD FOR SOME SECTORS OF ECONOMY
*CHINA SETS YUAN REFERENCE RATE AT 6.4921 AGAINST U.S. DOLLAR
*CHINA HIT BY 3 CAR, OFFICE BUILDING EXPLOSIONS, JIANGXI SAYS
HSBC Global Research