- Bernanke says Fed will tighten monetary policy when economy improves further
- Obama adviser Lawrence Summers says that US is committed to a strong USD
- Australian treasury chief urges caution on Australian economy
- China returns to markets after one-week holiday, shares and commodity prices rally
- Gold falls back below $1050 on the stronger USD
- Japans core machine orders +0.5%
- Bank of Korea keeps rates steady at 2%
USD/JPY has led the way as the USD starts to find some friends again. Comments from Ben Bernanke and Lawrence Summers regarding US monetary policy and the strong dollar policy have encouraged some profit taking by USD shorts.
USD/JPY opened at 88.60, fell below 88.40 before accelerating higher just before Tokyo opened. Profit taking after the Bernanke comments was the catalyst. JPY crosses also rose as higher regional bourses encouraged some risk-trade plays. Market talk refers to large stops above 132 in the EUR/JPY.
EUR/USD opened at 1.4780, briefly flirted with 1.4800 before falling swiftly on the various comments. Bids of decent size were noted around the 1.4700/05 session lows. Cable followed the EUR around in a 1.6000/70 range.
The AUD/USD fell early after the double whammy of Ken Henry/Ben Bernanke comments but a decent sized bid at .9025 has stopped the fall. There is talk of a big option defence at .9100 and the bid may have been the defender reloading!
Markets: Nikkei +0.7%; Shanghai +3.9%; HK +0.1%; Oil $69/bbl. Gold $1048/oz.
Ranges: EUR/USD 1.4706/1.4800; cable 1.5998/1.6072; USD/JPY 88.38/89.29; AUD/USD .9024/.9074.