- British Minister, James Purnell resigns and calls for PM brown to follow.
- RIO Tinto and BHP announce joint venture after Rio walks away from Chinalco deal.
- South Korean revised Q1 GDP -4.2% yoy.
- Australian May Construction Index rises 10.4 points.
- BOJ official: zero rates would hurt money markets.
- RIO/BHP story lifts AUDUSD towards 8050.
- Oil and commodity stocks lead Asian Stockmarkets. Both RIO and BHP trade up over 10% at one stage.
The RIO/BHP joint venture announcement caught the Aussie market short after RIO walked away from the Chinalco deal. It lifted AUDUSD from below 80c up towards the sellers at 8050. The commodity linked currency held firm and no retracement back towards 80c was seen as market looks to tackle the offers at 8050 going into Europe.
GBPUSD stayed under pressure all day, as traders unwound GBPJPY longs and sold GBP at 1.6250/60. Pressure from EURGBP buying saw GBP remain subdued all day.
EURJPY saw short covering throught most of the day before running out of steam just short of the 137.75 area. There is a reported mix of stops and sellers between 137.75 and 138.00.
USDJPY was not in focus today as the Asian market squared positions going into the NFP tonight.
EURUSD: After an initial move higher above 1.4200 on EURJPY and EURGBP buying, EUR spent most of the day around the 1.4200 area. Notable sellers at 1.4250 kept the top intact with traders happy to play range 1.4180-1.4220.
All eyes on NFP tonight with traders saying a weak number is factored into currency market and only an absolute shocker will spark risk aversion. Let see.
Goodluck,
Sam