• No major developments but the USD fell, mainly against the JPY and other Asian currencies
  • China’s trade surplus falls, but still very strong
  • Gold makes another record high above $1070/oz
  • BoJ considering its exit strategies
  • Regional equity markets mixed. Wall Street fell slightly but better-than-expected earnings from Intel after the bell bolstered regional bourses. Nikkei eventually dragged lower by financial stocks.
  • Chinese appetite for commodities shows no sign of waning
  • Australian consumer confidence index +1.7%

The USD lost ground against all the other major currencies during the Asian session. USD/JPY opened around 89.70 after the JPY crosses enjoyed a buoyant NY session, GBP/JPY in particular. When no fresh buying emerged at the Tokyo fix, USD/JPY and the crosses all started to drift lower. Stops below 89.30 were triggered and the pair is now working through solid bids around 89.00 level.

EUR/USD has been fairly quiet, falling early on some EUR/GBP selling but regaining the lost ground and a little more as the USD selling intensified. Sterling rallied early against all others but has given these gains back as momentum has waned. There has been no sterling related news today but dealers report that some big funds started covering their GBP shorts overnight.

The AUD/USD fell early in the session but the Chinese economic data has reinvigorated the commodity story and the pair will close the session close to its highs. NZ finance minister English was again vocal in trying to talk the NZD lower.

Markets: Nikkei -0.3%; HK flat; Oil $74.75/bbl; Gold +$2.5 @ $1068/oz.

Ranges: EUR/USD 1.4840/90; USD/JPY 88.92/89.89; cable 1.5904/50; AUD/USD .9055/.9138