- RBNZ leaves rates unchanged at 2.5%
- BoC’s Carney- China running great risk with Forex policy
- US homebuyer tax credit plan set for approval
- German hedge fund story still impacting risk trades
- Regional stock markets fall by over 2% on average, following 2% fall on Wall Street
- Gold steady at $1030/oz
- RBA widely expected to raise by 25 bps next week
- Toshin launches have little effect on AUD/JPY
More of the same in Asia today with the so called ‘risk aversion’ trades in favour. USD/JPY opened at 90.80 but has fallen steadily through the day and shown little sign of a bounce. The range so far today has been 90.25/81. JPY crosses were again led by the AUD/JPY and the NZD/JPY which have become the trades of choice for risk aversion plays.
EUR/USD has been dominated by some big option plays close to the market. There is said to be a big expiry at 1.4680 later today NY cut. This should ensure that the spot rate doesn’t deviate too far from this level. The range has been a fairly quiet 1.4684/1.4730. Sterling has been similarly quiet in a 1.6340/1.6405 range and GBP/JPY has seen the usual volatility inside 147.65/148.95.
The AUD/USD has also been pressured today although the market lacked follow through on the break below the overnight .8960 low. Toshin-related buying has not been strong enough to turn short term sentiment around. CTA-type accounts have been the main sellers of AUD/USD and offers are said to be heavy between .9050/.9100. The NZD fell after the rate decision and the statement from Chief Bollard which was interpreted to mean that there will be no rate increases over the next few months.
Markets: Nikkei -1.9%; HK -2.2%; Kospi -2.3%. Gold $1030/oz, Oil $76/bbl.
