Westpac Favors Buying USD/Asia On Dips Ahead Of FOMC Announcement
09/21/2011 - 05:57:00 (RTTNews)(RTTNews) - Analysts at Westpac noted on Wednesday that the market will be reluctant to get aggressively long USD/Asia ahead of tonight's Federal Open Market Committee announcement. With little hopes of the FOMC hitting the USD sentiment, the firm prefers adopting the strategy of buying USD/Asia on dips.
The research group said that CHF and JPY were under the scanner today on potential intervention fears. While noting that the Swiss National Bank have not announced a new policy to justify its earlier move to curb CHF appreciation, the firm noted that speculation of a JPY intervention seemed to be a false alarm.
AUD/USD failed to break above its New York session's high of 1.0300 and the EUR/USD traded in a quiet range of 1.3679 and 1.3724. NZD/USD was very subdued, trading within the 0.8209-0.8241 range. Although USD/JPY rose to 76.86 from 76.11, easing fears of intervention kept the pair stable at 76.35. USD/CHF steadied at 0.8940 while GBP/USD eased to 1.5725 ahead of the Bank of England minutes.
Most of the major USD/Asia pairs have traded within a tight range, although regional equity markets brushed off Wall Street's late slide. The 1-month USD/KRW traded between 1144 and 1153, while USD/SGD moved in a range of 1.2585 and 1.2640. The 1-month USD/MYR Non-Deliverable Forward traded back through 3.1200 before some buying interest emerged. IDR and PHP have posted modest gains against the USD but well within recent ranges.
With a lower than expected USD/CNY fix, which is coming 100 points down, the 12-month USD/CNY Non Deliverable Forward hovered around the 6.3350 level. The firm is expecting further downside pressure on the USD/CNY fix ahead of this week's G20 meeting. Although the firm prefers holding CNY, it recommends waiting for a rally up towards 6.3500 before entering into fresh short positions.
No comments:
Post a Comment