- China FDI +11% YoY
- USD/CNY set at new record low 6.3797
- BOE Bean: UK inflation will ease next year
- Vince Cable: QE is an initiative which can restore consumer andf business demand
- Equity markets rally strongly after overnight central bank actions; +2.5% on average
- Gold slides again, down 0.7% on the session and now trading at $1770/oz
Once again very little to report from a quiet Asian session.
Initially, the market watched the Asian currencies to see what would happen there after some big sell-offs in recent days. The central banks actions overnight in adding USD liquidity was expected to soothe the panic selling in emerging market assets. The KRW rallied on the open but reversed immediately and this caused the only move of the session in the FX market.
EUR/USD fell immediately when USD/KRW started to recover. After opening at 1.3875, it fell to 1.3840, but well reported bids, although relatively light, were still strong enough to base a market lacking in momentum. The market has since recovered at a snail’s pace back to mid-range levels. Range: 1.3837/84
AUD/USD followed a similar path, taking its leads from the Asian currencies. The strong equity market performance has been ignored with no-one having any interest in taking on risk before the weekend. Ranges: 1.0290/1.0340
USD/JPY has again traded a 20 pip range between 76.64/86 and USD/CHF .8691/.8725
Cable didn’t react to statements from either business secretary Cable or BOE’s Bean. Range: Cable 1.5780/1.5807, EUR/GBP .8762/89