Risk appetite was scaled back during the Asia session after another Japanese earthquake and news that Japanese officials had upgraded the severity of the nuclear disaster to a “7″ – this is the highest possible level on the scale and puts the tragedy in Fukushima on a par with Chernobyl. The yen and the Swiss franc were bought on safe-haven demand, and AUDJPY in particular fell sharply. EURUSD traded 1.4377-1.4446, USDJPY 83.47-84.79. Continue reading →

The dollar failed to claw back ground lost on Friday, even though US politicians averted a “shutdown” of the Federal government by reaching an eleventh-hour compromise deal on spending plans. EURUSD traded 1.4441-1.4484, USDJPY 84.63-85.16. Continue reading →

Risk sentiment has been supported overnight, mainly in response to the confirmation that the Fukushima nuclear plant has not suffered damage on the back of yesterday’s sizeable aftershock in northeast Japan. Hence most Asian stock market indices are trading firmly in the black. Elsewhere, US President Obama and Congressional leaders have so far failed to reach a budget deal to avoid a government shutdown. President Obama said less than 30 hours are left to reach an agreement, though he added that an agreement is still expected during the day. EURUSD traded 1.4292-1.4405 and USDJPY traded 84.97-85.39. Continue reading →

The dollar drifted higher against most G10 currencies during the Asia session. AUDUSD was the exception however, hitting a new post-float high after a stronger-than-expected employment report. The euro showed no obvious ill effects from Portugal’s decision to request external financial assistance. Clearly, rate expectations continue to be the key driver of currencies, as market participants look ahead to the ECB meeting. EURUSD traded 1.4297-1.4343, USDJPY 85.11-85.50. Continue reading →

The FOMC minutes from the March 15 meeting confirmed what recent Fed speeches have suggested – a mild divergence of opinion is starting to emerge on the FOMC. Australian economic data continues to turn over, and home loan lending declined again in February. EURUSD traded 1.4208-1.4267, USDJPY 84.58-85.53. Continue reading →

The US dollar strengthened after Fed Chairman Bernanke said that further commodity price rises could boost US inflation, and that the Fed would have to respond if higher inflation was sustained. Nevertheless, he felt any inflation spikes are likely to be “transitory”, which diluted the apparent hawkishness of his remarks. The RBA kept policy unchanged, as expected. EURUSD traded 1.4186-1.4233, USDJPY 83.93-84.49. Continue reading →

Commodity currencies made fresh gains against the US dollar during the Asia session despite the general lack of news flow. AUDUSD broke 1.0400, and USDCAD also traded heavily on the back of M&A reports. EURUSD traded 1.4217-1.4268, and USDJPY 84.05-84.38. Continue reading →

The dollar gained sharply on a hawkish headline attributed to Minneapolis Fed President Kocherlakota. Newswires claimed he signaled the possible need for up to 75bp worth of hikes before year-end. EURUSD traded 1.4154-1.4206, USDJPY 82.82-83.74. Continue reading →

Price action lacked conviction during the Asia session, although the dollar lost some ground against the euro. EURUSD traded 1.4116-1.4167 and USDJPY 82.57-83.21. Continue reading →

S&P downgraded Portugal to BBB-, the second downgrade in less than a week, and also cut Greece’s sovereign rating to BB- from BB+ Continue reading →

Risk sentiment was relatively stable in overnight hours, with most Asian stock market indices trading in the black. However, continuing uncertainty over Japan’s nuclear plants and the risk of rising radiation levels kept buying interest in Japanese stocks muted. US stock futures are trading 0.3% higher at the time of writing. EURUSD traded 1.4061-1.4095 and USDJPY traded 81.54-81.76. Continue reading →