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3 Mar 2015
Asia Recap: AUD bids re-enter market as RBA holds rates
FXStreet (Bali) - The Australian Dollar was the top performing currency in Asia, after the RBA surprised the market by leaving the interest rate unchanged at 2.25%, despite the door for further easing this year was left wide open.
AUD/USD saw a spike to 0.7839 after the RBA decided to keep rates steady at an all-time low of 2.25%, with the pair subsequently testing 0.78 bids before a fresh round of buying took the rate back up towards 0.7825/30, with the market presently accepting higher levels. There was a suspicious pop in AUD/USD 30 seconds pre release, although market sources attributed the move to large local players removing bids and offers. April inter bank market is now pricing in a 57% chance of a cut by the RBA following today's rate hold decision.
The RBA left the doors open for further cuts though, noting that "while it was appropriate to hold interest rates steady for the time being, further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target." RBA added "The Board will further assess the case for such action at forthcoming meetings."
USD/JPY saw a sharp slide from 120.20+ down to 119.60 session lows. According to reports via MNI, the decline was partly attributed to comments crossing the wires by government's Adviser Honda, who suggested that the exchange rate may be reaching the upper limit of what is seen as relatively acceptable. On the fundamental front, Japan's labor cash earnings (YoY) (Jan) stood at 1.3% in Jan, unchanged from last month. The Nikkei 225 erased gains, -0.15% heading into the close.
Earlier in Asia, Australia building permits (MoM) came in at 7.9% for the month of January vs -1.8% expected, while the current account deficit saw also a number above forecasts too, at -9.6B in Q4 vs -11B expected.
AUD/USD saw a spike to 0.7839 after the RBA decided to keep rates steady at an all-time low of 2.25%, with the pair subsequently testing 0.78 bids before a fresh round of buying took the rate back up towards 0.7825/30, with the market presently accepting higher levels. There was a suspicious pop in AUD/USD 30 seconds pre release, although market sources attributed the move to large local players removing bids and offers. April inter bank market is now pricing in a 57% chance of a cut by the RBA following today's rate hold decision.
The RBA left the doors open for further cuts though, noting that "while it was appropriate to hold interest rates steady for the time being, further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target." RBA added "The Board will further assess the case for such action at forthcoming meetings."
USD/JPY saw a sharp slide from 120.20+ down to 119.60 session lows. According to reports via MNI, the decline was partly attributed to comments crossing the wires by government's Adviser Honda, who suggested that the exchange rate may be reaching the upper limit of what is seen as relatively acceptable. On the fundamental front, Japan's labor cash earnings (YoY) (Jan) stood at 1.3% in Jan, unchanged from last month. The Nikkei 225 erased gains, -0.15% heading into the close.
Earlier in Asia, Australia building permits (MoM) came in at 7.9% for the month of January vs -1.8% expected, while the current account deficit saw also a number above forecasts too, at -9.6B in Q4 vs -11B expected.