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The
Australian dollar lost ground during the session after Q4 wage growth
data came in softer than expected, at +0.8% q/q vs. the +1% expected.
The y/y on wage growth figure was +3.1% which is far below the
current official inflation rate at 7.8%. Negative real wage growth is
not supportive of wage-price spiralling inflation and takes some of
the heat off the Reserve Bank of Australia to hike rates. Some, but
not much. The cash rate is 3.35% against that 7.8% headline CPI.
There is thus still work for the RBA to do with a March 7, the next
policy meeting date, looking to be another ‘no brainer’ rate
hike.
</p><p class="western">The
New Zealand dollar, on the other hand, has net moved higher for the
session, although it off its high. The Reserve Bank of New Zealand
‘looked through’ the ‘short term’ cyclone devastation impacts
and hiked rates by the widely expected 50bp. More details on their
reasoning, and their warning that there are higher rates yet to come,
in the bullet points above.
</p><p class="western">USD/JPY
had a trip to the downside, losing 30-odd points before recovering to
more or less flat on the day. We had public comments from Bank of
Japan policy board member Tamura, who supports a review of BOJ policy
but nevertheless affirmed that it is appropriate to maintain monetary
easing.</p><p class="western">Offshore
yuan (CNH) fell to its lowest since around January 4 this year,
basically fully retracing all of its January gains.
</p><p class="western">Asian
equity markets:</p><ul>
<li><p class="western">
Japan’s
Nikkei 225 -1.3%</p>
</li><li><p class="western">
China’s
Shanghai Composite -0.25%</p>
</li><li><p class="western">
Hong
Kong’s Hang Seng -0.1%</p>
</li><li><p class="western">
South
Korea’s KOSPI -1.3%</p>
</li><li><p class="western">
Australia’s
S&P/ASX 200 -0.4%
</p>
</li></ul>
This article was written by Eamonn Sheridan at www.forexlive.com.
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