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USD/JPY losing ground, support at 95.50
USD/JPY has taken on an easier tone today, reacting to an unexpectedly upbeat Japanese industrial production report overnight. Support on the charts comes ion at 95.50 while stop-loss sell orders are eyed at 95.40. The greenback emphatically rejected a test of the 200-day moving average yesterday, casting a technical cloud over the recent run-up. We trade now at 95.65.
CAD and GBP the flavors of the month at the fixing
The month-end fixing is said to be dollar-negative across the board with demand for CAD and GBP particularly prevelent, custody bank sources say. MSCI rebalancing is said to spark for the demand.
The dollar is consolidating losses across the baord, awaiting NY NAPM data at 13:00 GMT and Chicago PMI at 13:45 GMT. The latter will garner the bulk of the attention.
Canadian current account better than expected
Canadian Q-1 current account deficit came in at C$ 9.06 bln versus a revised C$ 7.76 bln in Q-4 2008. This is better than the median forecast of C$ 10.4 bln.
The hope will be that with the global economy showing signs of recovery, and commodity prices moving higher, that it won’t be long before we see a turnaround and the deficit start to come down at a decent clip.
Canadian dollar is playing a blinder, USD/CAD presently down at 1.0990, pretty much the session low.
US Q1 GDP revised to -5.7%, weaker than expected
US Q1 GDP war revised modestly higher, but not as much as the market had expected. The revision was to -5.7% from the 6.1% reported last month. Economists had expected a revision to 5.5%. The market is not to concerned with this data as we’re more than half-way through the second quarter and the landscape has shifted amid “green shoots” in recent months. Core PCE, the Fed’s favored inflation measure is nicely positive at +1.5% in the latest data. No deflation there…
EUR/USD trades at 1.4108 after reaching 1.4135 on an erroneous headline earlier in the session.
USD/JPY relatively steady at lower levels; talk of 96.00 vanilla option expiries
USD/JPY isn’t straying too far from 96.00, presently at 95.90. Sources report 96.00 vanilla option expiries today at 14:00 GMT and as a result there’s a good chance we’ll not see prices stray too far. Talk of bids down at 95.70/80.
It should be remembered there is talk of USD/JPY sell interest lined up for todays fix at 15:00 GMT.
Asian central bank sold AUD at highs; 80.00 barriers rumored
Dealers report that as Asian central bank was a seller AUD/USD at session highs as the pair approached the 80.00 level. No surprise, barrier options are rumored there. AUD demand at the month-end fixing at 15:00 GMT is rumored. AUD trades now at 0.7982.
Reuters flubs UAE headline: CB NOT diversifying forex reserves
A classic case of projection by Reuters: Write what you want to hear, not what is actually said.
The governor of the UAE central bank says he is NOT diversifying forex reserves away from the dollar.
EUR/USD has dipped to 1.4105…
It’s a funny old world (part 3), or was it 4
At a time when South Korea could do with all the support it can get from the U.S. administration as it’s neighbour in the North threatens, there they are announcing they’re cutting their exposure to US bonds and selling the crap out of the U.S. currency.
Sources report that the Bank of Korea has been a very aggressive buyer of EUR/USD today.
Seems to me it’s a funny old world.
Fed unconcerned by rate rise: WSJ
The Journal says the Fed is not concerned by the recent rise in bond yields. The rise refleects a mending economy, the thinking goes.
That is one aspect, but only a partial explaination for the soaring cost of long-term credit. Massive government spending creating an unending supply of bonds is responsible for the bulk of the move, most observers would agree. The US’s main creditor is loudly trying to change the course of US policy, making investors around globe wary of buying what they see as an asset which is sure to depreciate.
UAE central banker says diversifying away from the dollar
Spring 2009 is shapiong up very much like spring 2008. Oil is charging higher and the dollar sinking. Central bankers of heavily dollar-exposed economies are fretting over the falling value of their reserves and are starting to do something about it. Look for another bubble to form like last year…
The latest central banker on the wire is from the United Arab Emirates. He says they are diversifying forex reserves away from the dollar, giving EUR/USD a lift to fresh session highs at 1.4135.
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