Heavy demand for AUD/JPY and CAD/JPY today is helping keeping USD/JPY very well underpinned with dealers making a bet on a short-deep global recession with a quick rebound in mid-2009. Steady demand from a large Swiss bank has been rumored this afternoon.
Whether or not those bets will hold up for very long remains to be seen but there does appear to be some early optimism as the new year kicks off.
Usually when riskier assets are in vogue, the dollar suffers, but that has not been the case today. The market continues to price in another ECB rate hike on January 15 as the focus turns to rapidly falling inflation in the Eurozone.
EUR/USD just dipped to 1.3550 and USD/JPY trades near 93.50.
