Dollar still relatively neutral on the day after yesterday's beating
It's been a quiet trading session so far from Asia up till now. Ranges have been subdued, so let's see if things will improve during the European session.
The AUD leads on the day, but not by much - just minor moves really. The CNY also got a boost after the PBOC strengthened the yuan in its fixing today again, to its strongest level since December 2015.
Other currencies mainly traded range-bound so far. The NZD has fallen a little as I'm seeing here that AUD/NZD breaks away from the 200-hour MA, likely prompting further buying in the pair. Though, there's a bit of topside resistance nearby:
Meanwhile, the JPY is the laggard on the day as a result of USD/JPY buying. Some Japanese institutions are commenting that the 110 level is a key psychological level, especially for Japanese exporters.
A strategist from Tokai Tokyo Research Center says that "the 110 level is important because it's a psychological support for dollar-yen, and the forecast exchange rate in the Tankan report is around that area".
Meanwhile, Michiyoshi Kato, senior vice president of FX sales at Mizuho Bank in Tokyo, says that "the drop in USD/JPY to the middle of 110 levels spurs buying in Japan". He adds that, "a break below 110 would negatively affect Japanese equities, which is likely to see jawboning from the nation's authorities".
USD/JPY hit a low of 110.33 yesterday, but has since rebounded and is now at 110.76 after hitting highs in the Asian session of 110.98.
