Sharp Reversal Continues on Asian Session as War Tension Eases

Sharp Reversal Continues on Asian Session as War Tension Eases

HONG KONG, H.K. – Yesterday’s sharp reversal has continued into the morning session in the Asian market as the tension over war starts easing.

During the morning’s Asian session, major US indexes has already recorded a modest but uphill gain of between 0.05% and 0.07%. The optimistic market sentiment on Thursday also extended to most of the indexes in the region, with the Hong Kong 33 index increasing by around 0.15%, while the Japan 225 index recorded and advance of about 0.48%.

On the other hand, the Japanese yen continued to lose most of its previous safe haven gains as it drops by around 0.07%, going down to 109.21 points during the early session against the US dollar. The Japanese yen has also dropped by 0.20% towards 75.06 points against the Australian dollar early today.

Meanwhile, the data published early today showed the consumer prices in China, which increased by 4.5% year-on-year in December. It recorded the same pace as November’s data, which marks the country’s highest numbers since January 2012. The major reason for the stubborn massive prices was the increase in the pork prices during the month, which went as much as 97%, following the swine flu outbreak eliminating the local herds the previous year. Further, with the Lunar new Year celebrations coming, pork prices are expected to remain high throughout the month.

Because of this and the weakening of the US dollar, the USD/CNH pair is expected to continue dropping and will eventually hit its third straight day of decline today, marking its lowest value since August 1, 2019.

On the other hand, the Australian dollar was lifted by the risk rebound and the trade balance of the country in November. The trade surplus increased to around 5.8 billion Australian dollars, from October’s 4.5 billion Australian dollars, although it missed a bit from the 5.9 billion Australian dollar that was previously expected. The major driver in the balance rise is the 3% decline in imports and the 2% increase in exports for Australia.

The currency pair AUD/USD, meanwhile, is leaning towards breaking the five-day consecutive declines, which recorded a 2.4% drop for the pair that brought it to its lowest value in three weeks.

In Germany, according to the newest survey of economists, the industrial production is showing a 0.7% increase month-on-month for November. The latest data us a strong turnaround from the recorded 1.7% drop in October. The trade surplus of the country, on the other hand, is dipping from the previous 20.6 billion euros to its latest 20.0 billion euros, mainly dragged by the 0.5% decline in exports.

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