Aussie drops steeply as CPI disappoints; Asia shares mostly lower
On Wednesday the Australian dollar dropped steeply after a slower pace of consumer
prices than expected ahead of the latest Federal Reserve views on
interest rates. Asian stocks were mostly lower.
AUD/USD fell 0.87% to 0.7127, after the data, while USD/JPY changed hands at 120.41, down 0.03%, after disappointing retail sales.
NZD/USD last traded down 0.46% at 0.6733.
In Australia, consumer prices for the third quarter rose 0.5%, against a gain of 0.6% expected quarter-on-quarter and an annual pace of 1.5%, compared to 1.7% seen.
In Japan, retail sales declined an unexpected 0.2% as retail fuel sales plunged, against a gain of 0.4% seen year-on-year for September for the first year-on-year drop in six months.
Asian stocks were mostly lower ahead of the conclusion of the Federal Reserve's two-day meeting.
Hong Kong’s Hang Seng Index was down 0.7%, and the Shanghai Composite lost 0.9%. Chinese energy shares fell in Hong Kong, with China Shenhua Energy Co. and China Petroleum & Chemical Corp. both down roughly 2.5%.
South Korea’s Kospi was down 0.4%. Australia’s S&P ASX 200 dipped 0.2%, with energy shares on the benchmark 1% lower.
Stocks in the region have showed weak performance this week, before the Fed's conclusion of its two-day policy meeting on Wednesday. Although the U.S. regulator is widely expected to leave benchmark interest rates unchanged near zero, investors will eye the Fed’s post-meeting statement for clues about the path of its monetary policy, as well as about possible reinvestment of proceeds from holdings of government bonds accumulated since the financial crisis.
Angus Nicholson, a market analyst at brokerage IG noted that investors are reluctant to put big positions ahead of two big events: “Markets are at a tipping point, hesitant of rallying further ahead of what the Fed and BOJ do.”
Remarks from the European Central Bank last week about possible easing in December sparked a rally across global equities, just before China’s central bank cut interest rates late on Friday.
