A distinct risk-off mood took hold at the Asia open after civil unrest in Egypt escalated over the weekend. Both the dollar and the yen initially found support on safe-haven demand, but sentiment soon steadied when no signs of a further deterioration in the political situation materialised. EURUSD traded 1.3571-1.3615, USDJPY 81.78-82.23. Continue reading →

The FOMC kept current policy unchanged, given it still has concerns about low inflation and a weak labour market. No dissenting votes were cast. Clearly, although regional Fed Presidents Plosser and Fisher have publicly expressed some misgivings about QE2, they are willing to go along with the existing asset purchase program for now at least. Continue reading →