Feb. 26: Asian session
Asian shares pared declines. MSCI Asia Pacific Index slipped 0.1% after falling as much as 0.4%. Trading at Wall Street ended flat. Investors were concerned about the policy moves in China amid a drought of major economic data. Chinese yuan stabilized after falling sharply on Tuesday. Dealers suspect the People’s Bank of China has engineered the recent decline in its currency to inject more two-way volatility into the market and hurt speculators who have large bullish bets on Chinese currency. Still the MSCI index has advanced by 2.3% this month.
USD/JPY edged up from support at 102.12. AUD/USD has recovered back above $0.9000 after dipping to $0.8970 early in the Asian trade. Aussie’s upside remains limited as long as China concerns persist. Australia Q4 construction work done is another negative factor for the currency: the indicator unexpectedly fell by 1%. NZD/USD is trading in the positive zone, hovering around $0.8330. NZ Prime Minister English said the rate rises in the country are inevitable, but didn’t precise any timing.
EUR/USD keeps consolidating in the $1.3740 area. GBP/USD declined to $1.6670 from yesterday’s peak after peaking at $1.6727 yesterday.