• Japan September PMI rises to 3 year high at 54.5.
  • Japan August Industrial output up 1.8% MoM.
  • Australia August retail sales up a whopping 0.9%, AUDUSD immediately jumps 30 pips higher.
  • Australia August building approvals -0.1%.
  • Talk of oversubscription to government inflation linked bonds adds support to AUD.
  • Talk of Large Asian Central bank selling USD against a broad range of currencies.
  • End of month caution sees Asian bourses flat to slightly down.
  • Gold higher at 995.50.

Talk of a Large Asian central bank selling USD across the board stopped the bulls in their tracks. The day however belonged to the AUDUSD, which after the release of better than expected retail sales figures, popped higher to test the offers at 88c.

There was some end of month demand for EURJPY and USDJPY at the Tokyo fix but was no match for exporter offers and selling from a large government affiliated entity above 90.40. USDJPY topped out at 90.40, the overnight high and at one point fell away 30 pips in a matter of seconds to below 90.00 on route to 89.60. The Nikkei which started the day positive, fell away as exporters were sold off on the back of USDJPY back under 90.00.

EURJPY briefly blipped above 132.00 before it found itself lower on the back of USDJPY and sellers at 132.00. If it wasnt for EURUSD trading higher with the AUDUSD, it could easily have found itself sub 131.00.

EURUSD took advantage of the weak USD and enjoyed the ride higher with AUDUSD. However with offers still at 1.4650 and EURGBP sellers weighing on the cross, the move was limited to just above 1.4630.

The AUDUSD traded cautiously higher early morning but once the retail data was released it immediately popped from the 8750 to the 8780 area. It continued to trade with an underlying bid tone, trading up and testing the offers at 88c. Talk of an oversubscription of a government inflation linked bond also added support. Japanese AUDJPY offers above 79.10 and the heavy selling just above 8800 has halted the move up for now.

Ranges:

EURUSD 1.4575 – 1.4632

GBPUSD 1.5949 – 1.6033

USDJPY 89.64 – 90.41

EURJPY 131.10 – 132.03

AUDUSD 8707 – 8804

Goodluck,

Sam