Yesterday afternoon’s reversal sputtered in Asia as the reality of the global recession was front-and-center in dealers’ minds. A sharp slowdown in Chinese growth to 6.8% in Q4 and 9.0% in 2008 was a reminded of tough times ahead as was the BOJ meeting in which the central bank warned of two-years of deflation ahead.
Yesterday’s yen strength brought warnings from the Ministry of Finance that rapid moves are not good and that they are watching the market carefully.
Wednesday’s GBP rebound was short-lived with debt concerns helping spark a fresh EUR/GBP rally. The UK’s Debt Management Office said it sees no funding crisis ahead despite the weak pound.
Next up for the market is weekly US jobless claims data; 540,000 new claims are expected by economists.