- Risk was back on in Asia with stocks in Shanghai up by 1.75%
- Rumours of a low inflation figure tomorrow in China sent the AUD higher on the day
- Japanese Q4 GDP -0.4% QoQ, first quarterly fall in 15 months
- Japan’s EconMin Yosano says economy stagnated but signs of pick-up emerging
- China’s exports fall by 2.2% in January, imports rise by 2.2%
The USD has fallen against the other majors during Asian trade with the GBP and the AUD the main beneficiaries. The AUD benefitted from reports out of China regarding tomorrow’s inflation data and the GBP benefitted from flows and stop-loss buying.
EUR/USD opened on a weak note in Asia after closing in NY around 1.3530. More weekend speculation regarding the Irish debt bail-out saw the EUR try to push lower in early interbank trade but bearish momentum was missing ahead of technical support at 1.3470. The EUR/USD intraday rally was mainly helped by cable and AUD/USD and the pair closes the session basically unchanged. Ranges: EUR/USD 1.3502/51, EUR/CHF 1.3149/75.
Cable has made solid gains throughout the session with talk of China again buying towards the 1.6000 level encouraging some aggressive short-covering. Trailing stops above 1.6040 were also triggered and the GBP also made solid gains on the crosses. Inflation and interest rate talk in the UK weekend press will have spurred on the sterling buying. Ranges: Cable 1.5986/1.6077, EUR/GBP .8424/61
The AUD/USD tried to push lower along with the EUR/USD but the risk-on atmosphere in regional stockmarkets gave the AUD a lift as did the rumours of a Chinese inflation rate below 5% (consensus forecast 5.3%). Decent housing data out of Australia also helped. Ranges: .9983/1.0068
USD/JPY remains capped by plentiful corporate offers near 83.70 and has gradually drifted lower in line with the mildly weaker USD. Ranges: 85.15/57
