We will see a couple of numbers from Japan shortly which undoubtedly will be ignored…Manufacturing PMI and Industrial Production
Australian MI Inflation Guage and Private Sector Credit will have similar interest.
The Euro trades at 1.3580, as the market awaits further reaction from Tokyo and we see assessment of another geo-political shock to the (formerly ) establishing bull trend!
Just remember that these scenarios are usually short lived ( think Korea etc) so retain that ability to bend over backwards to be flexible
- expected fall $100m
- The Yearly surplus was NZ$ 1.13bn vs expectation $1.33bn
- December Exports were on target at NZ$ 3.80bn
- December Imports were higher than expected at NZ$ 4.05bn vs NZ$ 3.83bn expected
- December New Housing Consents fell 18.6% against previous month
NZ/USD trades 0.7700 ish , low at 0.7698 and AUD/NZ 1.2855
The German Chancellor, Angel Merkel, gave a strong and passionate speech in support of the EUR at the World Economic Forum in Davos on Friday night.
Dave will take over now for a few hours and I’ll be back around lunchtime.
Traditionally, the USD and the CHF are the main safe-havens in times of trouble and the big question then is which currency to sell.
At the moment, the EUR is the easiest currency to sell as Sovereign debt worries are never far from the surface so when traders are looking for a reason to be short, they don’t have to look far. The other currency which is often sold in times of risk-aversion is the AUD but that is still a very expensive short to fund.
Reasonably heavy stops are being reported below 1.3540 and they may come in for some attention in early Tokyo trade if the EUR cross selling continues. The main technical target below there would be the 100-day MA at 1.3490.
If you want a strong currency, get one of the ratings agencies to downgrade your country’s debt, get into a deflationary spiral which will last for years, keep printing money and issuing debt and keep interest rates at zero. That’s what Japan’s situation looks like and the JPY seems unable to weaken.
The bulls are hanging out for Kampo bids which are supposedly in the 81.80 region.
Fears of an escalation of the troubles in Egypt and a possible spread throughout the region have led to some risk aversion in early interbank trade. EUR/JPY is trading at 111.40 after closing at 111.75 on Friday night, USD/JPY is trading just below 82.00, and EUR/CHF is trading around 1.2800.
To all of our readers who may be affected by any of the troubles, good luck.
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