Central bank expectations and yield adjustments remain the key driver for FX markets but jitters over the situation in the Middle East and its wider impact are now proving too hard to ignore. Although markets have managed to segregate event risk, Brent and WTI crude futures have broken through $110/bbl and $100/bbl respectively – levels which could prove damaging to the global economy at a particularly crucial time in the recovery. Continue reading →

An uneasy calm descended over FX markets during the Asia session, and risk currencies managed to hold their ground despite continuing concerns about Libya. The dollar fell further against the yen, but has steadied against the Swiss franc. EURUSD traded 1.3649-1.3712, USDJPY 82.53-82.89. AUDUSD crept back above parity although there seemed to be little conviction behind the move. NZDUSD continues to languish sub-0.75. The euro remains supported on expectations of a hawkish ECB press conference next week. Continue reading →

Risk appetite declined sharply during the Asia session as tensions in Libya increased, New Zealand was struck by another powerful earthquake, and Moody’s lowered the outlook on Japan’s sovereign rating from stable to negative. Sentiment was not helped by a sudden (but brief) 30-pip spike in USDJPY as the Asia session got underway. EURUSD has traded 1.3563-1.3685, and USDJPY 82.84-83.54. Continue reading →

Price action lacked conviction during the Asia session, despite the emergence of a partial agreement at the weekend G20 meeting. EURUSD traded 1.3666-1.3716, USDJPY 83.02-83.19. The G20 agreed on a set of economic indicators that could eventually be used to measure the scale of global imbalances. The list includes public debt and fiscal deficits, private debt and the savings rate, and the trade balance and net investment income flows and transfers. Continue reading →

The dollar stabilized during the Asia session after yesterday’s losses. Newswires were largely silent, and the BoJ minutes from the Jan. 24-25 policy meeting were unremarkable. EURUSD traded 1.3589-1.3627, USDJPY 83.24-83.42. Continue reading →

A lack of news flow ensured a relatively subdued Asia session, although the dollar still weakened against most of its G10 peers. EURUSD traded 1.3536-1.3609, USDJPY 83.50-83.86. The FOMC minutes showed diminishing downside risks, however, the “assessment of the most likely outcomes for economic activity and inflation over the projection period was not greatly changed.” Continue reading →

Conviction was generally lacking during the Asia session given the shortage of news headlines and economic data releases, though remarks from the SNB supported the Swiss franc. EURUSD traded 1.3476-1.3540, USDJPY 83.69-83.88. Asian stocks are moderately ahead at the time of writing, although the S&P 500 finished down -0.32% earlier. Continue reading →

Dollar performance was mixed during the Asia session with losses incurred against the euro, while further gains were made versus the yen. EURUSD traded 1.3473-1.3528, USDJPY 83.20-83.56. AUDUSD was temporarily supported by China’s CPI print, which was more benign than consensus forecasts. An uneventful BoJ policy announcement had no currency impact. Continue reading →

Dollar performance was mixed during the Asia session with the greenback holding on to Friday’s gains against the euro, but surrendering some ground to the yen. The Nikkei-225 is currently up more than +1.1%. Indeed Asian equities are broadly higher after official confirmation on Friday evening that Egypt’s Mubarak has stepped down as president and has ceded control to a military council. Continue reading →

The dollar held firm overnight on a combination of elevated yields and caution in equity markets. EURUSD traded in a range of 1.3552-1.3621 and USDJPY 83.21-83.52. A Japanese holiday limited volumes somewhat, though given yesterday’s jitters in Eurozone sovereign bond markets and ongoing geopolitical tension in the Middle East, we would expect the dollar to continue enjoying underlying support, especially with data surprises to the upside in the US. Continue reading →

The dollar recovered lost ground during the Asia session, after an earlier bout of weakness in the aftermath of Fed Chairman Bernanke’s speech. EURUSD traded 1.3689-1.3744, USDJPY 82.20-82.60. Continue reading →