The JPY and USD have made marginal gains in overnight Asian trade, underpinned by heightened risk aversion. EUR/USD is down at 1.3910 from a North American close Tuesday around 1.3925, while EUR/JPY is down at 131.15 from around 131.95.
Asian stocks posted hefty losses reflecting the soured sentiment, which wasn’t helped by the release of some poor Japanese economic data.
Japanese machinery orders forMay unexpectedly fell for the third month in a row, down 3%, way worse than the median forecast of a + 2% increase. The Japanese current account meanwhile shrank -34.3 from a year ago, much worse than the median forecast of -25%.
Sterling has been a loser, cable down at 1.6090 from a North American close Tuesday around 1.6130, while EUR/GBP is marginally firmer at .8645 from around .8625.
The NIESR yesterday said UK Q-2 growth fell -0.4% and retracted it’s earlier pronouncement that the UK recession was over. The proximity of tomorrows Bank of England rate decision is also weighing, with the market expecting the bank to announce an extension of it’s quantitative ease programme.
