Usd was sold at the Tokyo open, same time it coincided with denial by Bank Negara that it issued a circular to forex dealers to disallow onshore banks in Malaysia from taking onshore fixing orders from offshore banks. EurUsd popped to 1.1149, onshore UsdMyr fell but larger impact felt on the 1-month NDF.EurUsd took off from 1.1122 to 1.1149. Some said stops were taken out near 1.1140 and I suspect EurGbp stops near 0.7100 were also triggered. I hear more stops in EurGbp lurking above 0.7120 and in Euro, fresh offers atop 1.1190 and stops above 1.1215.
Move in UsdJpy this morning was disappointing. Was up at 123.93 and dipped to 123.82. We got the feeling Japanese aren’t too keen to participate in Usd sales amid BOJ buying ETF and today being Goto-bi Day. I heard bids are lined up to 123.50 and offers atop 124.25.
THE Aussie dollar is stuck. As mentioned 2-days ago, bids are lined up below 0.7330 to 0.7300 from exporters and upside offers from 0.7390.
During the selloff early part of Asia, UsdCad shifted from NY close of 1.3126 to low of 1.3001. Selling was just speculative and nothing to substantiate the move. Oil price is down, WSJ story about Canada’s high-cost oil-sands producers are struggling.
One thing for sure, Gold price is looking rather firm this morning. We started at 1133.9 and now 1138.0. I heard buyers are more systematic and offers are scarce.
Bank Negara issued a statement this morning denying a report that the central bank issued a circular to forex dealers to disallow onshore banks in Malaysia from taking onshore fixing orders from offshore banks. The actual report was published by a local Malaysian newspaper The Sun Daily. The newspaper said the circular was sent out on Tuesday, to FX dealers from local and foreign financial institutions that onshore banks will be strictly not allowed to take onshore fixing orders from offshore banks. Said pre-approval must be obtained from BNM directly for fixing orders from onshore-offshore corporate clients on a case-by-case basis.
The USDCNY central parity fix sent USDCNH down to 6.4423 from NY close of 6.4625. Patrick Bennett said he continues to look for Chinese Yuan to underperform on NEER (trade-weighted basis) thus any further Usd downside versus majors or regional pairs should not be matched in magnitude by USDCNY.