investingLive Asia-Pacific FX news wrap: Oil fell further, Aust CPI, RBI FX intervention | investingLive

Markets across Asia were shaped by softer energy prices, a cooler-than-expected Australian inflation print and policy signals out of China, with FX moves largely contained despite some initial volatility.

Oil prices continued to grind lower through the session. WTI crude fell more than USD 1/bbl after US President Donald Trump said interim authorities in Venezuela would hand over 30–50 million barrels of oil to the United States. Trump said the oil would be sold at market prices, with proceeds controlled by the US administration. The Wall Street Journal reported Trump is expected to meet with executives from Chevron, ConocoPhillips and Exxon Mobil later this week to discuss potential investment in Venezuela’s oil sector, reinforcing expectations of increased supply.

In Australia, November CPI undershot expectations, though underlying inflation remains sticky. Headline inflation slowed to 3.4% y/y, below forecasts, while monthly CPI was flat. Core inflation eased only marginally, with the trimmed mean at 3.2% y/y, still above the Reserve Bank of Australia’s target band. Black Friday discounting drove price falls in furniture, footwear and clothing, raising questions over how durable the disinflation impulse will be. The data kept rate-hike risks on the radar ahead of the RBA’s 2–3 February meeting, though the balance of evidence still supports a hold (IMO anyway).

Australian building approvals data were overshadowed by CPI but printed strongly, rising 15% m/m in November, driven by a 34% surge in volatile private unit approvals. Detached house approvals rose a modest 1%. While the trend remains upward, approvals remain well below the Housing Accord target, and higher-for-longer rate expectations may weigh on momentum ahead.

The Australian dollar dipped initially on the CPI release but quickly recovered, rebounding to around 0.6760.

In Asia FX, the Chinese yuan pulled back from a 32-month high after the PBoC set a weaker daily fix and reiterated its intention to maintain an appropriately loose policy stance, including scope for RRR and rate cuts. The Indian rupee strengthened after the RBI intervened to smooth volatility.

Equities saw pockets of strength. Hyundai Motor shares surged 15% to a record after its CEO met Nvidia’s Jensen Huang at CES, fuelling speculation around an autonomous-driving partnership. Meanwhile, rare-earth related stocks rose across the region after China imposed export restrictions on military-use items to Japan, raising supply-chain concerns.

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