The forex trading headlines for the European morning session
- Yen weakens on comments made in Asian session by Japanese fin min that G20/IMF do not oppose BOJ monetary policy
- Gold surges to USD 1425 lifting commodity currencies
- Nikkei closes +0.73% at 13,316.48
- Eurozone current a/c feb sa EUR+16.3 bln vs +15 bln exp +14.8 bln prev
- Italian industrial orders feb sa m/m EUR-2.5bln vs -1.4bln prev
- Cable boosted by reported M&A demand
While Asia did react to Mr Aso’s comments it was rather muted and running out of steam as Europe awoke with USDJPY falling back to 98.45 from 98.68 highs, but it wasn’t long before traders once again lit the blue-touch paper and yen sales were once again to the fore.
USDJPY eventually broke through 99.00 with the help of some ACB buying triggering stops to 99.15 then heading higher again to 99.34 ahead of good selling interest at 99.50. Helping it on its way was strong GBPJPY demand powering GBPUSD through sell orders at 1.5300 and then 1.5330 before pausing for breath only to get a second wind and then take out the strong sell interest at 1.5350 to post highs of 1.5368 with GBPJPY peaking so far at 152.53
Adding to the GBP demand was talk of some good buying interest on cable possibly linked to a Verizon buyout of Vodafone. Either way it was all enough to squeeze the shorts well and truly dry.
The euro lagged behind to start with but has been playing catch up in the past hour or so with EURUSD testing sell interest at 1.3100 and EURJPY resistance at 130.00. Eurozone data had little impact. Commodity currencies got a lift from an early surge in gold to USD1425 giving AUDUSD a double boost to 1.0342 and then 1.0359 after AUDJPY kept on going to 102.90.
All going quiet again as I type, but I’m sure it won’t be for long as traders pause for breath ahead of the arrival of US traders and await the official G20 statement later, but with most seeing further yen sales as the likely outcome. Prepare for a sharp reversal if they’re wrong.
