FX Flows

From the FXWW Chatroom: In their Quarterly Statement on Monetary Policy, RBA cuts inflation forecast – sharply from 2-3% to 1-2%. That shattered the AudUsd from 0.7465 down to 0.7405. We tripped over AudJpy stops under 79.50. Believe there are corporate bids into this 0.73-handle. Got to 0.7394. RBA watcher Alan Mitchell produced an article in AFR nudged AudUsd to 0.7382.

All Nzd did was follow the leader, Aussie dollar. Fell from 0.6882 to 0.6850. Small as compared to AudUsd because of interest in AudNzd, which fell to 1.0782 from 1.0844.

Japan returns and first thing they did at the Tokyo open was bought AudJpy and UsdJpy. Definitely no Turkey drama for them. Initially UsdJpy popped to 107.43 where offers are said to amass 107.40-50. UsdJpy turned around and with sales of AudJpy, Usd dipped to 107.04. Hearsay importers at 107.00.

Apart from oil futures, most of the commodity futures which started off weak has come back. Heard Chinese were better buyers of Gold futures after Shanghai opened.

UsdCad ended Toronto at 1.2855 climbed as oil futures slipped – printed 1.2881. From Bipan Rai, our strategist in Toronto – Despite the Alberta wildfires and tensions in Libya, crude prices didn’t follow through on earlier momentum which also carried over into UsdCad activity. Friday’s twin set of employment data is key to watch for and we will publishing a trade recommendation to go long UsdCad with levels depending on what the market’s reaction to the data.

Euro did absolutely nothing in Asia – 15-point range. Some offers have begun to surface into 1.1440’s and more, I heard, 1.1460. Most will keenly watch 1.1369, the 61.8% Fibonacci retracement. It will be an interesting weekend in Athens. Greek government is to submit 2 bills to be voted on Sunday, so that Finance Minister Tsakalotos can bring forth to the Eurogroup Finance Ministers meeting on Monday. WSJ says, “Few can expect a solution.”

US non-farm payrolls are back in the spotlight. Previously at +215k, CIBC forecasts +195k while market is +200k. I heard one big US bank revised to +240K. Then again, the real focus is the wage increase – anything above 0.3% will be good.

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