- Model funds started selling the JPY crosses early in the session. GBP/JPY led the way and this set the tone for the rest of the session. Cable eventually broke through a big bid at 1.6280 and triggered stops below.
- Stops in EUR/JPY below 133.50 were triggered when Tokyo opened but very heavy bids at 94.75/00 in USD/JPY and heavy Sovereign bids at 1.3900/20 in EUR/USD dissuaded further selling.
- Talk of significant buying interest in EUR/GBP also kept the pound on the back foot.
- Australian job ads fall 6.7%.
- NZ house prices rise 0.4%
- Oil prices continue to slide, now below $65/bbl
- Regional stock markets were mixed but generally slightly positive.
- Chinese Premier stresses need for stable economic growth and reiterates the position of USD as reserve currency ahead of G8
- China launches trial Yuan trade settlement scheme
The Asian session was dominated by flows with the JPY crosses again seeing most of the action. It was down first in the face of heavy selling from systematic model funds but there has been a decent recovery as the European open nears.
Sterling should be the most volatile currency into Europe with heavy bids and stops seen in the cable between 1.6150/1.6250. Dealers report a return of big bids in EUR/GBP, which may be signalling a pause in the recent downtrend.
Markets: Shanghai +0.3% Kospi +0.5% HK +0.3% Nikkei -1.25% . Oil $65/bbl. Gold $930/oz.
Ranges: EUR/USD 1.3954/90, USD/JPY 95.25/99.06, EUR/JPY 132.94/134.15, AUD/USD .7912/70, cable 1.6260/1.6320
