• No major announcements from the G20 and nothing about the USD
  • Amazingly the IMF suggests that the USD may be overvalued still
  • Strong forecast from Fonterra sees the NZD rally strongly
  • Australia Sept housing finance +5.1%
  • Australia October job ads -1.7%
  • NZ house prices continue to rise
  • Japan’s foreign reserves at record highs
  • Regional stock markets broadly higher by average 0.75%
  • Gold rises strongly to $1105/oz on struggling USD

There were some big moves in thin early interbank trade with cable again leading the way. These moves were blamed on a large number of stops being placed tight above the market, the lack of supportive USD comments out of the G20 and the IMF statement regarding the level of the dollar.

Cable closed in NY around 1.6605 but rallied in early trade to 1.6670 before stabilising. It pulled back to 1.6630 as early Tokyo sold GBP/JPY but has subsequently rallied almost another 100 pips as the USD-selling refused to abate. Range: 1.6618/1.6720.

EUR/USD closed in NY at 1.4845 but opened higher in Asia close to 1.4890. This pair lagged both the cable and AUD/USD for most of the session as a persistent sell order from a Sovereign name at 1.4915 continued to cap. Once this order was taken out, heavy stops from hedge funds were triggered and the pair rallied to a high at 1.4942. Range: 1.4854/1.4942.

The NZD/USD was the big mover early as it leaped from .7250 to .7350 on the Fonterra forecast. This also dragged the AUD/USD higher, from its close at .9190 to around .9250 in early trade. Solid forecasts from the CBA also helped the AUD/USD initially but it fell back under heavy AUD/NZD selling. The renewed bearishness for the USD again eventually kicked back in and the AUD/USD has renewed its march towards another .9325 test. Range: .9196/.9272.

USD/JPY fell early to its session low at 89.70 but has recovered throughout the session as positive results from regional stockmarkets encouraged some JPY-cross buying. Range: 89.70/90.22.

Markets: Gold +$6 to $1105/oz; Oil +$1 to $78.60/bbl. Nikkei +0.5%, Kospi +0.8%, HK +1.1%, Sydney +1.4%.