- Market readies itself for shift in Yuan valuation
- BoJ keeps rates at 0.1%, stays with easy monetary policy
- China issues conciliatory statements regarding it’s relations with US
- Chinese central bank adviser says rates may rise in Q2
- Generally favourable economic data for the UK on food prices, permanent employment positions and services/manufacturing productivity
- Regional stockmarkets rise with HK up by 1.25%
- Gold consolidates overnight gains
The early moves were driven by stop-loss hunts in both the USD/JPY and the EUR/JPY. Stops below 93.60 and 125.25 were triggered, but only marginally, and both pairs immediately jumped, a sure sign of a stop-loss triggering event. All of the JPY crosses then moved higher as risk appetite was increased by decent gains on the Hang Seng and by the conciliatory noises coming out of China towards the US. Ranges: 93.57/94.26 and 125.23/126.15.
EUR/USD was driven by movements in the crosses, mainly EUR/JPY, and there were no major Greece-related announcements to unsettle the market. Range: 1.3374/1.3408.
Cable fell early on the back of profit taking and the lower EUR/JPY but momentum has been sorely lacking in a 40 pip range. The market has not yet reacted to some semi-decent economic data. Ranges; 1.5236/75, .8768/82
The AUD/USD has had a very quiet session in a .9261/88 range after the RBA hike yesterday. Dealers expect some RBA intervention above .9320 but were unwilling to test this out.
Markets: Nikkei +0.3%, HK +1.25%, Kospi +0.1%. Gold $1136/oz, Oil $86.50/bbl.
