- USD/JPY opened at 94.25 but took out solid CTA-type bidding interest around 93.80/90 on it’s way to a session low thus far at 93.59. Dealers still report JPY buying ahead of this weekend’s election.
- Reports that China’s Sovereign Wealth Fund are to increase their overseas investments by up to 10-fold
- New Zealand reports an annual trade deficit of NZD$2.48 billion
- The NZD is the biggest loser on the day, falling against all other majors, especially the JPY where it lost 1.25% on the session
- Australia’s capital expenditure much stronger than expected
- Regional stock markets lose between 0.5% and 2%.
The initial focus for the market this morning was quite heavy stops in EUR/JPY below 133.80. When the Nikkei opened 0.6% lower and quickly lost more ground, these stops were triggered and USD/JPY fell towards bids in the 93.80/90 zone where it stalled for some time. Further stops just below 93.60 were triggered in the last hour or so. The AUD fell with the other majors but rebounded nicely on the good Capital Expenditure numbers. Short term bears booking profits also aided the bounce as has AUD/NZD buying flows.
The European currencies have been fairly quiet in 30 pip ranges and EUR/GBP has been similarly quiet in a .8770/85 range. I’m hearing that the player who bought heavily into dips on the .85 handle is now showing an interest to sell towards .8860.
Orders: Heavy stops in USD/JPY below 93.00; Bids in EUR/JPY at 132.90; Bids in EUR/USD 1.4210/20 and again at 1.4150. Bids AUD/USD .8125/35.
Ranges: EUR/USD 1.4220/54; Cable 1.6212/44; USD/JPY 93.59/94.27; AUD/USD .8240/88; EUR/JPY133.23/134.32.
Markets: Nikkei -2.1%; Shanghai -0.5%; HK -1.1%; Kospi -0.9%. Gold $946/oz. Oil $71.50/bbl.
