- World Bank raises China’s GDP forecast
- Japan’s CPI 0.0% YoY; unemployment rate 4.6% which was better than expected
- Japan’s household spending fell sharply; industrial output also sharply lower
- RBNZ keep rates at 2.5%; signal that they will stay so for extended period
- UK consumer confidence at lowest level in over two years
- Nikkei +1%; other regionals +0.4%
- Gold $1528/oz, Silver $48.50/oz
The lack of any attempt by Mr Bernanke to shore up USD sentiment was seen by the market as a green light to sell the USD and that’s what happened. Asian central banks pulled their interventionist bids and the USD fell across the board.
EUR/USD opened at 1.4770 having stalled in NY trade ahead of 1.4800 amid talk of quite heavy selling. These offers did provide some brief resistance but as has been the case at so many levels on the way up, once broken the uptrend accelerated. Dealers reported very few offers thereafter on the move higher. Ranges: EUR/USD 1.4767/1.4881, EUR/CHF 1.2913/53
Cable was the first pair to break higher this morning after the market completely ignored the poor consumer confidence data and triggered stops above the NY high at 1.6640 and again above 1.6650. This move stalled at 1.6670, retraced slightly before accelerating again through 1.6700. Lots of stops and no sellers was one dealer’s description. Ranges: Cable 1.6619/1.6745, EUR/GBP .8872/.8901
AUD/USD was also held up in the early part of the session by some heavy option-related selling between 1.0880/1.0900. The fall in the NZD/USD after the RBNZ statement also dragged the AUD/USD to its intraday lows. From there we’ve see another steady bullish session with the pair never pulling back more than 20 pips. The strong World Bank assessment of the Chinese economy also buoyed AUD sentiment. Ranges: 1.0848/1.0947
USD/JPY spent much of the morning session near 82.10 and the JPY crosses gradually drifted higher in line with the weakening USD. Once the JPY crosses hit some resistance pockets, USD/JPY got sold down through decent-sized bids between 81.70/80. The economic data was mixed with good employment data, not-bad CPI data, and disappointing household spending and industrial output figures. Ranges: USD/JPY 81.59/82.27, EUR/JPY 121.30/83