- Large earthquake in Christchurch sends the NZD lower
- Middle East tensions see oil prices rise sharply
- Moody’s downgrades Japanese debt outlook
- Regional sharemarkets fall by up to 2%
- Base metal prices fall sharply with Chinese Zinc over 6% lower
- General risk aversion sees USD short positions cut across the board
- Silver sets new 31 year highs near $34/oz
A very busy Asian session saw the USD make some significant gains.
USD/JPY was the first to move after a large French bank launched an attack in EUR/JPY, driving it from 113.70 to 114.20 in a matter of minutes in early trade. USD/JPY spiked from 83.15 to 83.55 before falling straight back down again. Stops were then triggered below 83.00 when the JPY-cross selling was at its height before rumoured Kampo bids, the Moody’s downgrade and a generally bullish USD saw the pair rebound. Ranges: USD/JPY 82.82/83.56, EUR/JPY 112.86/114.09
The NZD/USD fell sharply immediately after the earthquake hit, from .7620 to .7540, and the losses were compounded after expected NZD corporate purchases were cancelled due to the shocks. NZD/USD lost 2% on the day, down to .7489 from .7642.
The AUD/USD was also affected by the NZD selling and AUD/CAD corporate selling weighed; falling base metal prices also did not help sentiment. With general risk aversion so strong, it’s little wonder that the AUD/USD fell 1% from 1.0095 to 1.0000.
EUR/USD has also fallen sharply on the session with the stronger USD and EUR/JPY selling the main contributing factors. ABC buying at 1.3560 has provided a base so far but more stops are seen below 1.3525. Liquidity was described as poor. Ranges: 1.3560/1.3684, EUR/CHF 1.2880/1.2963
Cable has lagged the EUR/USD in a 75 pip range between 1.6150/1.6225, ensuring that the EUR/GBP drifted lower, ranging .8393/.8436.
