Mar. 10: Asian session
Asian shares fell after reports showed the biggest drop in Chinese exports since 2009 and tensions in Ukraine continue. MSCI Asia Pacific Index dropped by 1%. Japanese Nikkei is also down by 1%. The market’s sentiment was hurt as well as Chinese yuan fell on the central bank’s decision to cut the reference rate by the most in 1 1/2 years.
USD/JPY is testing 103.00 to the downside after peaking to 103.76 on Friday. Japanese GDP grew in Q4 an annualized 0.7% from the previous quarter, less than a preliminary estimate of 1%. The current-account deficit widened to the maximum since 1985.
Commodity currencies extend the downside after having peaked on Friday. The key bearish factors are the upbeat US NFP on Friday and weak China trade data (29B trade deficit vs. expected surplus of 14B) released on Saturday. AUD/USD opened the week with a bearish gap and weakened below $0.9040 after having faced resistance at $0.9135 on Friday. NZD/USD opened with a gap to the upside, but closed it by weakening to $0.8460. Kiwi remains pressured after hitting a 4-month top of $0.8520
EUR/USD rose to $1.3892, but is trading below Friday’s peak at $1.3915. GBP/USD edged up to $1.6440, but is trading below Friday’s peak at $1.6785.