ForexLive Asia-Pacific FX news wrap: Fitch place US credit rating on rating watch negative | Forexlive

We
had warnings on the US debt limit stalemate from both Moody’s and
Fitch today. Fitch placed the United States’ ‘AAA’ on rating watch
negative:

“The
contested 2020 presidential election, brinkmanship over the debt
limit to advance political agendas, and failure to reach consensus on
the country’s fiscal challenges are recent signs of the deterioration
in governance.”

More
in the bullet points above from both agencies.

The
Fitch announcement sent the yen higher, albeit briefly. Yen crosses
dipped across the board but soon recovered with USD/JPY making a high
above 139.60 as I post.

Earlier
in the session Nvidia announced beats (blowout beats!) in its
earnings announcement and provided extremely strong guidance. Its
shares rocketed higher in after hours trade. NASDAQ equity index
futures (NQ) on Globex found support on the news. The NVDA stock
rally has brought the chip maker within sight of a valuation of US$1
trillion.

In
regional news, South Korea’s central bank held interest rates steady
for a third meeting on Thursday, as expected, after a 1-1/2-year-long
tightening cycle. Singapore’s economy
contracted q/q
in the first quarter, raising the risk of a recession.

Across
major FX yen was the big mover (yen lower) but we did see declines
more broadly. EUR, GBP, AUD, NZD, CAD all down against the dollar.

Data
from Japan today showed the 8^th
consecutive week of net foreign purchases of Japanese stocks. If the
BOJ pivot and send the yen higher the foreign buyers will get a nice
windfall FX gain.

Asian
equity markets: