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Forex Daily Table February 11 2013Data/Event Risks

No major releases today that will upset things.  Markets more on guard for comments from officials ahead of G20 meeting (finance ministers and central bank chiefs) later in the week, but the truce seems to have been called there, with recent comments helping reverse some of the recent sharp moves in FX. 

Idea of the Day

Last week was mostly characterised by a correction of some of the strong trends of recent weeks, which meant a weaker euro, stronger yen and also sterling. This will largely be welcomed ahead of the G20 meeting later this week, as there were fears that recent currency movements could have caused tensions between those nations who were seeing their currencies appreciate, especially against the yen.  As such, there is certainly a calmer tone to FX markets at the start of this week, but for the most part this is seen as a pause in some of the recent trends, so talk of currency wars may yet resurface in the coming weeks.

Latest FX News

  • JPY:. Steady during the Asia session.  Market had one ear on dovish comments from Asian Developments Bank President Kuroda, who is one of the potential candidates to head up the Bank of Japan from the middle of March.
  • EUR:  Trading with a softer bias through last week, with some recovery seen during the Asia session to trade just below the 1.3400 level.  EURJPY holding the move back below the 125 level.
  • GBP:  Sterling held up well last week, recovering to the 1.58 area vs. the USD.  More marked correction vs. EUR, with EURGBP correcting by 3% over the past week.
  • AUD:. Against the US dollar, the Aussie is struggling below the 1.03 area and 200d moving average at 1.0313. We’re also seeing 4th consecutive session of falls in AUDJPY, with expectations of further rate cuts supported by labour market data last week.

Further reading: In Order to Weaken the Euro, the ECB Should Suspend the OMT

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