Kiwi dollar tumbled 1.24% against the greenback to 0.681 area, following central bank’s decision to stay put while hinting rate cut against the backdrop of sluggish global outlook.
Technically, its immediate support level could be found at 0.679 area (38.2% Fibonacci Retracement), whereas resistance level at 0.690 area (50% Retracement).
AUD/USD suffered similar pullback, falling 0.3% to 0.711 area. Reserve Bank of Australia gave similar signals in its meeting earlier this month, suggesting the next move is likely to be a cut in rates due to mounting evidence of economic slowdown.
Asian markets opened lower this morning, despite mild rebound in US equities last night. The US housing starts came lower than expected, registering 1.16 million due to rising raw material and labour costs. The consumer confidence index also came lower at 124.1, missing expectation of 132. Soft economic data reminded us that a global cyclical downswing is hitting the US as well, although to a less extend.
Singapore’s Industrial Production in February grew 0.7 percent YoY, largely in line with expectation and revising the decline seen in January. Overall industrial performance was underpinned by biomedical cluster, whereas electronics sector continued to show weakness. Moderated industrial production suggests the electronics manufacturing is going to trail behind other sectors until memory chip demand picks up – a scenario unlikely to happen before 2H19.
Boao Asia forum this year is of less significance compared to a year ago. It aims to unite Asian nations for sustainable economic development, promote the belt and road initiatives and advertise Hainan Free Trade Zone (FTZ), according to state-run media. So far there is little update about the trade talks with the US. The forum serves as a communication bridge between China and the rest of Asia, but so far we didn’t hear anything significant enough to bring about a big market impact.
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