The greenback continued to strengthen during Monday’s Asian session, particularly against the Yen and the antipodean currencies. Chinese data weighed on the Aussie and the Kiwi and held back the Euro somewhat as well, while the moves higher against the Yen was on the back of positive moves in the Japanese share market. The Nikkei found support after Japans first quarter GDP was revised up to 1.0% for the quarter and 4.1% annualised while the BOJ began their two day meeting with their decision due today. Overnight, Yen weakness continued as an upgrade by S&P of US outlook from negative to stable provided further support for the greenback, pushing USD/JPY back towards 99, while also boosting risk appetite, a situation which resulted in the greenback seeing most of its gains being realised against the Yen. Further greenback strength against other currencies was also limited by comments from St Louis Fed member Bullard who stated that any decision in winding back Fed stimulus should be entirely data related rather than timing, and when they do begin winding back it should be incremental amounts of around 10b. This would have eased some investor concerns of a sudden wind back of stimulus and being caught on the wrong side of the market if it were to happen. Most of the gains against the greenback were seen in the Euro which is currently at 1.3260, the shared currency also received a boost from comments by Draghi that interest rate will rise again once confidence in the economic recovery returns. Today sees the BOJ rate and policy announcement which many are hoping will attempt to revive recent weakness in the Yen by announcing further steps in spark inflation after Abe’s comments last week fell short of the markets aspirations.
Posted on: Tue, 11 Jun 2013 00:04:09 +0000