AUTOREFRESH 
Asian FX market wrap: sterling recovers some ground
Cable gains almost 100 pips on the session, EUR/USD grinds higher, AUD unchanged despite more solid economic data and the JPY tied in by big orders either side of the market.
- Cable rallied almost 100 pips after doubts began to emerge whether Prudential may have to pull out of AIG deal and therefore un-do FX hedging
- EUR shorts further un-nerved by reports that US Dept of Justice were investigating hedge fund activity
- Australian Q4 GDP as expected at 0.9%
- UK consumer confidence at highest level in 2 years
- Japanese wages rise slowly fr first time in 2 years
- Regional equity markets were generally flat
- Gold steady at $1136/oz
Big turnaround for the pound over the last session and a half as the market suddenly realised that it cannot simply sell sell sell. Cable closed in NY at 1.4970 and gapped to 1.5030 in early trade on the back of an FT article outlining possibilities that Prudential might not in fact be able to go through with it’s proposed purchase of AIG’s Asian unit. There have been further episodes of short-covering as the session progressed and more stops are anticipated above 1.5100 in the cable and above 134.00 in GBP/JPY. Ranges: Cable 1.4960/1.5075, GBP/JPY 132.50/133.65
The AUD has had a fairly uneventful session despite the GDP data. AUD/NZD has made a major technical break higher but option related selling ahead of 130.00 is capping the pair for now. Range: AUD/USD .9028/64
The EUR/USD has been modestly bullish throughout the session as shorts started to cover when cable moved higher. Nevertheless bearish sentiment still remains and the feeling is that the big shorts haven’t run for cover just yet. Range: 1.3607/53.
USD/JPY is tied in between big buy orders starting around 88.50 and big sell orders starting above 89.50. Economic data continues to improve with yesterday’s good employment data followed by some encouraging wage data today. Range: 88.48/85.
Markets: Nikkei, HK, Kospi were mostly flat. Gold also steady at $1136/oz.
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