FOREX NEWS | CURRENCY NEWS BY FOREXLIVE

ForexLive Asian market wrap: Risk trades make modest recovery as Asia buys Gold

• Japanese GDP rises on strong domestic demand
• PM Noda: Important for government and BOJ to work closely on beating deflation
• BOJ Shirakawa: Effect of monetary policy takes some time to appear; wants to achgieve 1% inflation goal asap; relying on monetary policy alone to defeat deflation can lead to unintended effects
• EconMin Furukawa: Will take bold steps against excessive FX market fluctuations; Japan still in moderate deflation but pace is easing
• Newspaper reports say that JP Morgan losses could be considerably higher than expected
• BHP warns that commodity boom starting to slow as Chinese growth matures
• Singapore’s GDP growth was +10% in Q1; exports rose by 8.7%
• Gold rallies by 0.6% as important support levels loom; ACBs reportedly buying near $1520/25
• Regional stockmarkets trade with 0.25% of yesterday’s closing levels

Not much to report from the Asian session, with some early short-covering in the NZD helping to steady the risk trades which were further bolstered by solid demand for Gold once Asia opened. There was a brief dip when the reports of further JP Morgan losses hit the newswires, but overall risk trades have managed a modest recovery.

NZD/USD was the first mover, moving up to .7670 from an opening level near .7645 on Tokyo buying. Solid corporate demand over the last 24 hours has helped to steady the market. AUD/USD followed its smaller neighbour higher and once Gold started to rise, the modest AUD recovery picked up a bit of pace. AUD/USD fell quickly by around 15 pips on the JP Morgan reports but overall its been a fairly insipid session. Ranges: .9905/53

EUR/USD has also managed a modest recovery but ranges have been tight. It has taken its lead from the AUD and from EUR/JPY, but flows have been fairly light. Range: 1.2712/49

USDS/JPY ignored the economic data yet again and also ignored the many comments from BOJ and politicians, trading in a 17 pip range between 80.22/39.

Cable 1.5906/32; EUR/CHF 1.2007/12

Singapore GDP growth still strong but EZ risks still weigh

More from Bloomberg

Reports that JP Morgan losses have increased by $1 billion

Slight dip in the risk trades a few minutes ago was caused by some newswire reports that the initial JP Morgan trading losses could be $1 billion greater than earlier reported.

Around the markets

Shares are mixed in Asia with most Bourses within 0.25% of their closing levels from yesterday.

Gold was up by 0.75% to $1548 but is now starting to ease back off those levels. Oil is trading back above $93/bbl.

Any chance of momentum building in the FX market looks to be lost for this session at least, with AUD/USD and EUR/USD now backing off their session highs and trading at mid-range levels.

BHP warns that commodity boom starting to slow

The Sydney Morning Herald reports on the double broadside from BHP’s CEO and Chairman. They say that the Chinese boom is maturing and that demand for steel will contract, meaning that the big Australian must decide if/where it’s next investments are made. They are not happy with the Australian government and are making a not-so-veiled threat.

Gold bouncing off strong support levels, aiding AUD

AUD/USD is at session highs near .9950 and dealers say that the market is closely watching the gold price for indicators. There is very important technical support near $1520/25 in Gold and ACBs are also reported to be buying near there so little wonder to see the Gold price moving higher in early Asian trade.

Japanese officials hogging the newswires

• PM Noda: Important for government and BOJ to work closely on beating deflation
• BOJ Shirakawa: Effect of monetary policy takes some time to appear; wants to achgieve 1% inflation goal asap; relying on monetary policy alone to defeat deflation can lead to unintended effects
• EconMin Furukawa: Will take bold steps against excessive FX market fluctuations; Japan still in moderate deflation but pace is easing

Singapore exports increase more than expected

• Non-oil domestic exports +8.3% YoY (7% expected)

USD/SGD is trading near 1.2650 and those option-related sellers which we’ve been mentioning between 1.2650/1.2700 are making further bullish progress a tough fight.

EUR/USD orders: Trailing stop-loss orders now likely above 1.2765, but real money sellers await

• EUR/USD made fresh intraday lows at 1.2680 yesterday and then rallied to 1.2760. It dipped from there but was unable to post fresh lows, which means that plenty of short-term trend followers will have their stop-loss orders just above that 1.2760 level.
• Solid sell orders are noted at 1.2795/00 from real money accounts.

NZD short-covering leads the way in early Tokyo

The Nikkei has opened -0.1% and the Kospi is +0.1%, so the market isn’t getting any leads from there.

Dealers say that short-covering in the NZD/USD has been the main factor over the last hour of trade, and this is encouraging AUD/USD and EUR/USD to ease higher as well.