- Sovereign wealth funds and Asian central banks have been buying EUR/USD, EUR/JPY and AUD/USD.
- FinMin Noda: Japan must explain intervention stance better to international partners
- Obama and Kan to speak next week; JPY intervention is on the agenda
- US pressure on China re trade and Yuan is increasing
- Asian stock markets rise by 1%; Gold at record highs
It has been a fairly uneventful session which has only been livened up in the last hour or so by Sovereign activity in the EUR and the AUD.
EUR/USD spent the first 2 hours of the session in a 5 pip range, dipped to a session low at 1.3062 on some early profit taking in EUR/JPY and EUR/CHF but it has bounced back strongly on some significant buying by one Sovereign wealth fund in particular and also Asian central banks. Ranges: EUR/USD 1.3062/1.3119, EUR/CHF 1.3274/1.3324
USD/JPY has been fairly stable with EUR/JPY buying helping to support but with the market also happy to sell ahead of heavy offers on the 86 handle. Ranges: EUR/JPY 111.92/112.45; USD/JPY 85.60/89
The AUD has been the other main beneficiary of the Sovereign activityjumping back above 94 cents after opening around .9365. Ranges: .9352/.9419
Cable has finally broken above 1.5650 very late in the session, triggering reasonably heavy stops. Heavy stops are also reported in EUR/GBP above .8410 with significant option interest to see a weekly close below that level. Ranges: Cable 1.5602/77, EUR/GBP .8365/80
Markets: Nikkei +0.8%, HK +1%, Shanghai +0.3%. Gold $1277/oz.