The dollar consolidated its recent gains after the Bank of Korea disappointed consensus expectations, and chose not to hike. Most USD/Asia pairs pushed higher in response, which in turn had a negative impact on risk appetite more generally. Memories of yesterday’s 50bp RRR hike by China merely added to the sombre mood. EURUSD traded 1.4184-1.4277, USDJPY 80.45-81.09. Continue reading →

Risk appetite remained fragile during the Asia session as commodities and stocks failed to bounce following yesterday’s selloff. A much weaker-than-expected Australian employment report further soured the mood. EURUSD traded 1.4172-1.4335, USDJPY 80.74-81.34. Continue reading →

Rising commodity prices and stronger equity markets gave risk appetite a boost during the Asia session. The combined effect was powerful enough to keep AUDUSD largely supported, despite some rather mixed Chinese data for April. Higher oil prices in particular helped the euro to recover some ground recently lost to the dollar, although speculation that a new Greece rescue package may eventually be announced also helped embolden euro bulls. EURUSD traded 1.4350-1.4423, USDJPY 80.72-81.09. Continue reading →

Australian and Chinese trade data were focal points during the Asia session. Both sets of numbers were impressive, which proved to be mildly supportive of risk appetite. The euro struggled to make much headway though, still weighed down by the memory of yesterday’s downgrade of Greece’s rating by S&P. Comments by ECB policymakers warning of the dire consequences of any restructuring of Greek debt led the euro lower as the European session got underway. EURUSD traded 1.4297-1.4377, USDJPY 80.16-80.57. Continue reading →

The euro partially recovered during the Asia session after Friday’s selloff. Friday’s moves were triggered by a report in a German newspaper claiming Greece was considering withdrawing from the Eurozone, and that an emergency meeting of European officials had been called to discuss the issue. A special meeting did take place on Friday night, but participants emphasised that the topic of a potential Greek exit was not discussed. EURUSD traded 1.4341-1.4407, USDJPY 80.52-80.85 on Friday. Continue reading →

Sentiment stabilised during the Asia session after yesterday’s heavy falls in the euro and the AUD. Silver continued to weaken, but at a far more moderate pace, and gold and oil both managed to claw back some losses. AUD was strongly boosted by renewed RBA hawkishness in the latest quarterly statement of monetary policy. Continue reading →

Public deficit data for 2010 indicates that if growth in the European Union returns to trend, the deficit will be 2.5ppt too high to stabilise the debt-to-GDP ratio, meaning public finances are unsustainable without fiscal tightening. While countries such as Finland and Germany are on relatively safe ground, France, Greece, Portugal, Spain and the UK require a severe adjustment that could hurt growth for years. Then there’s Ireland, which is 23.5ppt away from stabilising its debt-to-GDP ratio. Continue reading →

FX risk appetite declined a little further during the Asia session as silver weakened again. News that Portugal had agreed the terms of a financial aid package with the EU/IMF/ECB did little to shore up sentiment. EURUSD traded in a range of 1.4755-1.4861, and USDJPY 80.82-81.11. Continue reading →

The price action during the Asia session was choppy and stop-loss driven. The RBA’s policy statement was slightly more hawkish than the previous one, but there was not enough of a rhetorical shift to materially affect AUDUSD. EURUSD traded 1.4772-1.4882, USDJPY 80.98-81.29 Continue reading →

US President Obama announced that Osama Bin Laden has been killed by US forces in Pakistan. The dollar strengthened across the board shortly after the news broke. In fact, a nervous open by precious metals had already set the dollar on a strengthening trajectory. EURUSD traded 1.4763-1.4864, and USDJPY 81.00-81.69. Continue reading →

With Japan on holiday, and the FOMC statement fully digested, the price action during the Asia session was relatively subdued. EURUSD traded 1.4773-1.4848, USDJPY 81.47-81.71 Continue reading →