Daily Market Overview by FXNET

[Froso@FXNET]

Asian Session - Dollar regains some losses against yen

The US dollar rebounded against the yen to recover some losses made after a huge tumble following disappointing US nonfarm payrolls data on Friday.

The data raised concern about the health of the US economy and led to speculation that a Fed rate hike may be further delayed.

The weaker jobs number caused a sell-off in the dollar and investors were forced to unwind stretched short positions on the yen. This gave the Japanese currency a bit of a breather from recent weakening.

UDJPY climbed up to 103.48 yen in the Asian session, up 0.5 percent to recover some losses after its big drop on Monday, when the pair fell over 1 percent to a one-month low.

A trade report from Japan today showed that country’s current account recorded a larger deficit in November, weighing further on Japan’s balance of payments. This will dent sentiment on the yen.
In other currencies, the euro remained steady against the dollar, close to Friday’s highs when it rallied on the back of the US jobs report. EURUSD traded at $1.3666, off a one-month low of $1.3548 hit on Thursday.

The pound remains weak after falling on Monday against the dollar. Key risk for the sterling will be UK inflation data due later today. GBPUSD ended in Asia at $1.6387, rebounding slightly from yesterday’s low of $1.6346.

The Australian dollar, which has benefited from weakness in its US counterpart and hit a one-month high on Monday, has since retreated, down to $0.9034. AUDUSD is down 0.2percent from Monday’s high of $0.9087.

Key data to watch for in the European session will be UK CPI and Euro zone industrial production data. During the US session, US retail sales data are scheduled for release.

 

[Froso@FXNET]

Market report By Fxnet 15 Jan

Asian Session – Dollar broadly stronger after US retail sales

The dollar resumed strength after solid US retail sales data from Tuesday and managed to regain ground against the majors. Also buoying the greenback were hawkish comments from two Federal Reserve policymakers (Richard Fisher and Charles Plosser ) who signaled they are in favour of tapering and ending the Fed’s current bond buying program.

Plosser even downplayed the weak December US jobs report released on Friday.
As a result of investors’ expectations of a rate hike now being brought forward, this helped lift the dollar higher against most of its major counterparts.

December US retail sales edged up in December with a core spending index posting a big increase, a sign the US economy gathered steam at the end of last year and was poised for stronger growth in 2014.

The dollar built on Tuesday’s recovery against the yen, with USDJPY rising to highs of 104.46 in the Asian session. Yesterday the dollar rallied more than 1% against the yen to pull away from a near one-month low of 102.85 yen.

The Australian dollar was a currency that stood out as it slid nearly 1% to $0.8910, reversing a move towards $0.9100 cents early in the week.

The euro lost gains made from a rally yesterday against the dollar that was inspired by ECB Nowotny’s upbeat comments about the Eurozone growth outlook.

The EURUSD retreated from a two-week high just shy of $1.3700 hit on Tuesday to trade at $1.3626, down 0.3% from late US session levels.
The euro stayed close to yesterday’s high when EURJPY rose to 142.61 yen, slipping slightly to 142.37.

Sterling fell back moderately in line with broad dollar strength, with GBPUSD slipping from $1.6443 to $1.6412.

 

[Froso@FXNET]

Market Report 16 Jan

Asian Session - Aussie suffers big losses jobs data

The Australian dollar suffered heavy losses in the wake of the release of the December employment report. Jobs in Australia decreased by 22,600 last month, following November’s revised 15,400 gain, according to the country’s statistics bureau. This was a huge miss compared with a 10,000 increase predicted by economists. The unemployment rate remained at 5.8 percent.

AUDUSD tumbled over 100 pips after the data, falling to a low of $0.8794 from a pre-data level of $0.8903. On Monday the aussie hit a one-month high of $0.9085.

The US dollar continued to be the best performer as growing consensus in markets is that the Federal Reserve will continue with tapering on speculation the US economic recovery is strong enough.

Lending support to the dollar is stronger than expected manufacturing and PPI data and an upbeat Empire State manufacturing index from Tuesday.

The dollar rose for a third day against the yen, its longest advance this month, reaching a high of 104.91.

Initial jobless claims data in the US will be released today and will be the next risk event for the dollar. The figure for claims the previous week (period ending January 11) is forecast to fall by 328,000, which would be the fewest since November. The prior number was 330,000.

EURUSD opened in Asia at $1.3602 after trading as low as $1.3581 yesterday. The pair rose to $1.3627.

EURJPY rose in tandem with USDJPY, up from 142.23 early to highs of 142.90 yen.

GBPUSD trading was more muted however, as the pair traded a range between $1.6345 and $1.6373.

In the upcoming European session, a key risk event for the euro will be Eurozone inflation data (CPI).

 

[Froso@FXNET]

Market Report 20-01-2014
Asian Session - Yen bounces against US dollar

The yen recovered some losses against the US dollar during Asian trading hours. The Bank of Japan policy meeting will be a key risk event for the yen. Speculation that the central bank may hold off more easing is helping the currency rise against all its major peers today, while a decline in Asian stocks boosted its allure as a haven.
USDJPY saw weakness early in the session, dipping down to just below the key 104.00 yen level before moving back up to 104.15. EURJPY fell from 141.11 to 140.33 before bouncing to around 140.60.
The dollar however made gains versus the euro, reaching its strongest level since November. Lending support to the dollar is the fact that many expect the Federal Reserve to continue with tapering.

EURUSD drifted off early in Tokyo, but then there were small moves, as is often the case in this timezone. After a brief drop to 1.3506, the pair steadied above 1.3525.
The pound edged slightly lower against the dollar but remained buoyed following a good UK retail sales report on Friday. GBPUSD opened in Asia at 1.6416 and headed higher at the end of the session towards 1.6430.
AUDUSD opened in Asia at 0.8780 and traded heavy but sideways between 0.8756-80 initially. The relatively good China GDP data for the fourth quarter managed to give a leg up for the aussie, which rose to 0.8805. China is a major trading partner for Australia so any Chinese data are important for the AUD.
Today is a public holiday in the United States, so trading in USD especially in the US session will be quiet.

 

[Froso@FXNET]

Market Report 21-01-2014
Asian Session – USDJPY bounces on broad yen weakness

The US holiday on Monday and limited data releases kept volumes thin even in the Asian session. Most major currency pairs lacked clear direction although the yen pairs made some recovery in Asia this morning.
USDJPY rebounded to 104.68 in Asia from the US session low of 103.90. The US dollar is expected to improve as expectations grow for more Fed tapering and a more solid US economic recovery. Meanwhile a rising Tokyo Nikkei led to less flows into the yen.
Other yen crosses were bid, with EURJPY up from 141.07 to 141.823 and GBPJPY from 170.97 to 171.95.
EURUSD opened in Asia at 1.3550 after a very quiet North American session due to the US public holiday. The pair moved further off 2-month lows to a session high of 1.3560. This level proved to be strong resistance and due to the broadly stronger dollar, the euro was pressured down to the lower 1.3540s.
GBPUSD did not take any clear direction in Asia, continuing to trade sideways since it surged on strong UK retail sales data on Friday. Cable traded a range of 1.6410 and 1.6434.
AUDUSD edged slightly higher 0.8836, making a recovery from Monday’s more than 3-year low of 0.8755.
Looking ahead to the European session, German data will be in focus and could impact the euro. January’s ZEW economic sentiment index will be released, with a forecast of 64.0, compared to a previous 62.0.

 

[Froso@FXNET]

Market Report 22-01-2014
Asian Session - Yen weakens after Bank of Japan keeps monetary policy on hold

The main focus in the Asian session today was the Bank of Japan policy meeting. The yen briefly jumps higher after the BoJ kept policy unchanged, which was expected.

Disappointment arose as some investors had hoped for additional easing measures sooner rather than later ahead of a scheduled sales tax hike in April. As a result, the yen fell back down.

USDJPY had a choppy session. The pair traded above 104.15 before the BoJ announcement, then dipped to 103.95 before climbing back up to 104.56. EURJPY also see-sawed, and swung from lows of 141.04 to highs of 141.75.

The Australian dollar mostly stole the spotlight today, after a surprise surge on the back of domestic inflation data. Australian CPI rose 0.9% in the fourth quarter, the biggest pace of increase in over two years. Annual inflation rose 2.6%, the highest since 2011. The data now lessens the chance of a rate cut by the Reserve bank of Australia.

AUDUSD gained about 0.7% to $0.8863 after rising as high as $0.8873 from a session low of $0.8784. The pair has moved further away from a 3-1/2-year low of $0.8756 reached on Monday.

In other currencies, the euro was relatively steady against the dollar, as is typical in the Asian time zone. EURUSD briefly broke above $1.3600 before edging down to $1.3555.

Sterling will be in focus later today as key risk events could impact the currency. The UK will be releasing data on employment. GBPUSD opened in Asia at $1.6475 and traded a 20-pip range.

 

[Froso@FXNET]

Market Report 23-01-2014

Asian Session – Aussie back down after China PMI

Chinese PMI numbers were the main focus of the Asian session, which missed forecasts and dampened sentiment. The HSBC flash manufacturing PMI came in a 49.6 versus 50.3 that was expected and fell into contraction territory for the first time in 6 months.
China is the second largest economy in the world so any data released from there are closely watched by investors. Meanwhile, the Australian dollar typically tends to be impacted by Chinese data since China is a major export destination for Australia.
AUDUSD fell at a fast pace after the China PMI data, dipping to $0.8786, down from the session open of $0.8848. The pair erased all gains made yesterday when the aussie was boosted after data showed Australian inflation rose more-than-expected and lessened the likelihood of a rate cut by the RBA.
The yen strengthened on safe haven flows after the disappointing data from China today. Despite a broadly stronger US dollar, the USDJPY fell to 104.26 from an earlier session high of 104.82.
The dollar is expected to remain in demand as long as there are expectations that the Federal Reserve will continue with tapering.
Meanwhile, all eyes will be on upcoming US jobless claims data later in the US session. Expectations are for a decline from 3 million to 2.9 million in the week ending January 11.
In other currencies, the euro was showed little movement, as is typical for this Asian session. EURUSD remained stuck in its recent 1.3500-1.3600 range.
However a key risk event for the euro will be today’s PMI data from the Eurozone.

 

[Froso@FXNET]

Market Report 24-01-2014

Asian Session – Dollar broadly lower after disappointing US data
Risk - off sentiment dominated the markets in Asia after disappointing US data in the prior session dampened the mood. As a result, the US dollar was broadly weaker against most of its major counterparts following a series of soft data.

USDJPY plunged to a low of 102.96 after the data late on Thursday, and was bought on the dip in Asia. The dollar attempted to recover some losses but the upside momentum was weak and it fell back to 103.22 yen.
The euro consolidated gains made yesterday when it was propelled to a four-week high against the dollar on the back of upbeat manufacturing and services activity data from the Eurozone. Other data indicated that consumer confidence in the region improved more than forecast in January, also helping buoy the euro.
EURUSD opened in Asia at 1.3696 just shy of last night’s 1.3699 high but remained above 1.3680 throughout the Asian session.
Sterling remains strong, buoyed by upbeat UK jobs data on Wednesday which showed the unemployment rate dropped to 7.1% from 7.4% the three months to December.

 

[Froso@FXNET]

Market Report 27-01-2014

Asian Session – Yen remains buoyed on safe haven demand as emerging markets tumble
Risk - off sentiment still lingered in at the start of the new trading week, as the turmoil in emerging markets continue to dominate the mood. The Japanese currency gained after being buoyed by safe haven demand in volatile markets as emerging markets tumbled.
An indication of how much volatility existed in markets last week, the Emerging Markets ETF VIX (Volatility Index) surged 40%, which was the largest jump in over 2-1/2 years.
USDJPY fell early in the Asian session, dipping over 45 pips to a low of 101.74 but recovered quickly to rise back above 102, ending at 102.4, back to around Friday’s levels.
Yen crosses traded similarly, with EURJPY down to 139.25 before bouncing to 140.25 while GBPJPY fell to 167.86 and then 169.11. AUDJPY saw lows of 88.40 before rising to 89.50.
It should be noted that trading volumes were thinner than normal today due to the holiday in Australia.
The US dollar will be the currency of focus this week as the Federal Reserve starts a two-day policy meeting tomorrow.

 

[Froso@FXNET]

Market report 28-01-2014

Asian Session - Pound rises as focus turns to UK GDP data

After much volatility in currency markets on Monday due to the emerging market turmoil, Tuesday was calmer.
While most major currency pairs were steady and range-bound, especially EURUSD, USDJPY, the most notable moves were made by the pound, as GBPUSD extended gains into the Asian session.
The pound climbed back to a near 3-year high against the dollar ahead of key UK data later today. GDP numbers will be released, with expectations for a confirmation of strong growth in the British economy in the last quarter.

GBPUSD rose to $1.6624 from $1.6582 at the open of Asian session trading. The pound’s strength may out some pressure on the dollar for now.
However the dollar could be expected to regain a firmer footing against the yen as the Federal Reserve meeting comes closer. The Fed begins its 2-day monthly monetary policy meeting today and will announce its policy decision tomorrow.
There are expectations that the Fed will scale back its stimulus further and this is helping pull the dollar off a 7-week low against the Japanese yen. USDJPY was steady in Asia and barely moved while trading sideways, ending the session at 102.61 yen.
The Australian has also proved to be resilient and was another currency that performed well in Asia today. AUDUSD rose to $0.8791, well above Friday’s low of $0.8659.