FX Flows

From the FXWW Chatroom: Massive GbpJpy demand into and after the Tokyo fix sent Cable to high 1.3025 from 1.2988. UsdJpy chewed away offers up to 103.00. There could have been some weak stops above 103.00 too, met one German name paying up offers aggressively.

Short covering took UsdJpy to 103.29. Then the Japanese official started talking. Just one comment from Economy Minister Ishihara that PM Shinzo Abe has not orders stimulus packing sent UsdJpy back to 102-handle.

There were also demand for AudJpy into fix and helped lift Aussie to 0.7545. Buying continued out of Tokyo and took AudUsd to 0.7568. NAB published the June business confidence rising to +6 from +3. Business conditions improved as well to +12 from +10.

UsdCad slipped on back of higher Aussie dollar also on price of oil futures. Buy orders are light and with oil moving up, we might see a push lower.

EurUsd advanced as well but our traders noticed offers placed in the e-commerce platforms above 1.1090. High was 1.10915 and the 200-Day SMA is 1.1092.

Be very wary of the topside risk in Euro. I see and hear stops above 1.1115 and there are also stop buy orders on top in Euro-crosses. Do note there is a Eur1.5bn strike 1.1050 option expiry today NY cut.

Emerging Market
We suspect some hidden action in the Chinese Yuan today. Onshore USDCNY came off the 6.69-handle onto the 6.68’s. This has dragged the offshore USDCNH towards 6.7000 from 6.7047. Do note that the past 3 fixing rates are close to onshore spot USDCNY level.

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