March 3rd, 2014
There were fresh fears surrounding risk appetite during the weekend as Ukraine concerns dominated and this provided some fresh defensive demand for the Japanese yen with gains at the Asian open. There were reports that Russian forces had control of the Crimea region which increased diplomatic tensions and fears over wider military confrontation.
As the Nikkei and regional equity markets came under pressure, USD/JPY was trapped below the 101.50 level. Equity-market selling pressure was contained which averted more substantial moves in risk assets with the Australian dollar resilient. Similarly, although EUR/USD also gapped lower at the Asian open, it found support above the 1.3750 level. Read the rest of this entry »
February 28th, 2014
The Chinese yuan remained an important focus in Asian trading on Friday with a further slide to the 6.18 area against the dollar which maintained a very cautious tone towards risk appetite. In this context, USD/JPY retreated back below the 102 level with lows near 101.50.
EUR/USD held firm during the Asian session with only a very limited dip below the 1.37 level. The Euro was boosted initially by a much stronger than expected +2.5% reading for German retail sales which offset a sharp decline seen last month. Read the rest of this entry »
February 27th, 2014
The Euro initially remain on the defensive on Thursday, but did prove resilient at lower levels. Euro-zone data releases were an important focus during the session and, although the latest German unemployment data was better than expected with a further 14,000 decline for February from a 28,000 decline previously, the data was overshadowed by another set of weak monetary data. Money supply growth was restricted to 1.2% in the year to January and private lending contracted by 2.2% which caused considerable concern given hopes that lending might have recovered following a year-end squeeze. Read the rest of this entry »
February 25th, 2014
There was further weakness in the Chinese yuan on Tuesday with the spot rate moving lower than the official mid-rate for the first time in close to 18 months which maintained a cautious attitude towards both the Chinese economy and overall risk. USD/JPY was unable to make any challenge on resistance levels above 102.60, edging lower into European trading. Read the rest of this entry »
February 24th, 2014
The latest CFTC positioning data recorded a decline in dollar longs to the lowest level for over three months which provided some degree of protection for the US currency on Monday, especially as there was also a return to net Euro longs in the latest week.
There were fresh concerns surrounding China’s property sector with reports that funding to real-estate companies was being restricted. There was a sharp decline in the Shanghai equities index which triggered regional market declines and a deterioration in risk appetite. The yen gained fresh support and USD/JPY dipped to lows below 102.20. The dollar continued to find robust buying support on dips and moved back to 102.50 in New York. Read the rest of this entry »