China concerns push AUD sub 0.9000
City Index September 16, 2014 2:30 PM
<p>Ratings agency Standard and Poor have again expressed concern at the rising level of debt seen in China, adding that the financial sector is the […]</p>
Ratings agency Standard and Poor have again expressed concern at the rising level of debt seen in China, adding that the financial sector is the biggest risk to the China growth picture, if not the global economy. Meanwhile, the Chinese Commerce Ministry has signalled that the pace of export growth cannot be maintained and there are signs that the domestic economy is struggling.
The CNH is unsurprisingly under pressure as spot trades back towards 6.17 and one month volatility trades considerably higher at 3.6% from 2.15% yesterday.
The concerns about the Chinese economy have weighed on the AUD overnight as the RBA minutes from the September meeting revealed concerns on house prices: “housing prices were continuing to increase in the larger cities and members considered that the risks associated with this trend warranted ongoing close observation”.
The lifestyle was pushed back below 0.9000 as RBA member, Kent, added the AUD had remained surprisingly high given the decline in commodity prices.
USD/JPY briefly traded back below 107.00 overnight as US 10-year yields extended declines seen yesterday but the dip was brief as the BoJ’s Kuroda was quoted by the media as suggesting that the BoJ will make adjustments to policy without hesitation if needed; adding that he feels the drop in domestic demand following the tax hikes is somewhat diminishing.
Sterling will take a break from the Scottish Referendum polls today as we focus on the inflation data released this morning and we get the latest ZEW survey from the faltering German economy. Plus, PPI data due for release from across the pond this afternoon.
Supports 1.2900-1.2855-1.2820 | Resistance 1.2985-1.3000-1.3040
Supports 106.55-106.10-105.80 | Resistance 107.60-107.95-108.30
Supports 1.6165-1.6140-1.6060 | Resistance 1.6285-1.6345-1.6400
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.