- Australian CPI higher than expected at +1.6% QoQ
- Japan’s retail sales show biggest decline in 13 years, -8.5% YoY
- S&P cuts Japan’s debt rating
- RBNZ New Zealand business outlook improves markedly to +14.5 from -8.7
- USD/CNY fixed at new record low of 6.5096
- Regional stockmarkets generally higher but Australian shares fall on inflation worries
- Metals have quieter day; Gold +$4 to $1508/oz and Silver +$0.75 to $45.80/oz
The main events were firstly a stop-loss run in USD/CHF during early Sydney trade which led to stops being triggered across the board and later on the Australian CPI and S&P Japanese decision have had an impact.
USD/CHF was the first mover in thin and illiquid trading conditions between NY close and Tokyo open. The pair fell from .8740 to .8666 as stops below .8700 were triggered. Ranges: USD/CHF .8766/.8841, EUR/CHF 1.2746/1.2818
EUR/USD breached the 1.4650 barrier in NY trade and opened in Asia at 1.4540. When the USD/CHF started to fall, EUR/USD broke above the NY high triggering some light stops. A barrier at 1.4700 was then also targeted and breached but the market has stalled on two occasions near the 1.4710 level. Ranges: 1.4639/1.4710
AUD/USD stalled at length below 1.0800 as heavy selling kept a big knock-out option safe. This eventually broke and further offers near 1.0830 were also filled after the higher than expected inflation number. The market will now start to focus on what an inflation-fearing RBA is likely to do. Ranges: 1.0773/1.0851
USD/JPY triggered stops below 81.35 whilst the USD/CHF was in freefall. Large option expiries are noted for later today, NY cut, with a strike price of 81.50 and this ensured that both dips and rallies either side of this level found plentiful business. The S&P downgrade caused a brief spike to 81.75 but we close mid-range. Ranges: USD/JPY 81.25/77, EUR/JPY 119.41/96
