The move of EUR/USD from 1.3110 to 1.3140, and USD/JPY from 87.43 to 87.83, in the blink of an eye … well, that was the Japanese Finance Minister Taro Aso saying Japan will buy bonds issued by the euro zone’s ESM bailout fund. EUR/JPY, too, gapped up, from 114.60 to 115.25.
- Up until then the Yen had been gaining ground during the day, with USD/JPY as low as 87.23 in the morning, finding resistance on the bounce ahead of 87.60. After the ‘ESM bond’ news the USD/JPY gradually lost ground again, around 87.45 as of the writing of this wrap.
- EUR/USD had a quiet morning, with a battle between buyers and sellers confining it to a narrow band around 1.3120 before it drifted lower to just under 1.3110. Post ‘ESM bond’ news it went quiet again, back down to 1.3120/30 range.
- AUD lost ground during the session , to a low of 1.0476. NZD traded lower with it, to 0.8353. Cable performed strongly on the session, as high as 1.6129 before back down to 1.6100.
Other news/data for the day:
- WSJ article: Japan Executives Urge Caution on Yen
- Australia data: AIG Performance of Construction Index 38.8 (vs. 37.0 in November)
- Australia November Trade Balance Goods & Services -$A2.637Bn (vs. -$A2.3Bn expected)
- Japan releases draft on emergency economic stimulus measures
