The Lunar New Year celebrations are starting on Thursday in many Asian countries and will go on for a week. Most of the big regional players will not be particularly active in the FX market and whilst I’m sure we’ll still hear reports of China doing this and that, the spectre of ACB buying in EUR/USD is likely to recede. On the other hand, there is also likely to be much less buying by ACBs in USD/Asia.
The reduced activity could mean that we either see some even quieter markets in Asia or the reduced turnover leads to increased volatility and sharper moves.
Physical gold buying is also likely to be reduced although India will still be fully active.
