Asian stock markets went higher on the back of rising US manufacturing output and a jump in euro zone business activity. MSCI Asia-Pacific index of shares outside of Japan advanced by 0.4%. Nikkei 225 climbed by 0.9%. Investors are waiting for the Fed’s 2-day meeting to begin today and also look forward to US inflation data due at 13:30 GMT.
Australia is in the market focus today because of the 2 releases: the RBA December monetary policy meeting minutes and Australian Mid-Year Economic and Fiscal Outlook (MYEFO). The RBA minutes showed the regulator saw the rate cut still on the table. There was nothing new in the release, but in the combination with the RBA Governor Stevens last week’s comments the regulator’s sentiment sounds pretty dovish. The MYEFO sketched a grim outlook for the economy, threatening to lower the consumer and business sentiment in the future. Australia’s Treasury forecasts the budget wouldn’t return to surplus for at least a decade. The budget deficit forecast for the 2013/2014 fiscal year was almost doubled to $42 billion.
Despite all these bad news, the Australian dollar remains surprisingly resilient. AUD/USD is consolidating in the $0.8930/60 area, holding above the 3.5-month low of $0.8909 set on Friday. NZD/USD strengthened from $0.8240 to $0.9280. USD/JPY is trading in the 103.00 area. Yesterday the pair tested 102.70, but managed to close higher.
EUR/USD edged up to $1.3770, but is still below Monday’s high at $1.3798. GBP/USD edged up to $1.6320, but is still below Monday’s high at $1.6348.Publication source