Posted on: 11 May 2016, by: Pepperstone Support, category: Market Review
Ranges persisted in G3, while G10 commodity and EM currencies advanced slightly against the USD. Flow-wise, EM remained the focus.Higher equity and oil prices were supportive of the price action. Neither market weighed on US fixed income, which is roughly where it closed Monday. In fact, fixed income was bid in early NY, leading these asset classes. JPY was the worst performing currency globally against the USD on Tuesday. Thank broader sentiment and continued intervention warnings.Abe advisor Hamada says Japan would intervene if USDJPY at 90-95. Seems this 'warning' level is just getting lower and lower and USDJPY actually slipped lower on the headline. MoF and BoJ officials were also testifying in Parliament. Aso reiterated that it’s natural to intervene in forex markets if one-sided movement continues and the G7 & G20 has agreed that drastic excessive FX moves is undesirable. He adds it’s premature to say whether FX will be topic of the upcoming G7 meeting. BoJ deputy governor Nakaso says considerable downside risks to price and growth remain, and the BoJ will examine risks at every policy meeting and take fresh steps if needed. CHF was the worst performer in G10 after JPY, while EUR performance was nearly flat against the greenback. Still, USDCHF failed to test a key resistance: the 0.9788-0.9850 area. EURUSD spent most of the session around 1.1400/1.1360. AUD was the best performer on broad sentiment. NZD underperformance stood out in early London but it has recovered back towards 0.6760.