FX Flows It was an exciting day – NOT – FXWW Chatroom

The price action in EurUsd is rather similar to yesterday but milder. Euro ended NY at 1.1155 and shifted lower as we approached the Tokyo fix. Bids planted at 1.1120-30 and stop sell orders are beneath 1.1080. Good bids at 1.1070. Most banks have sell orders above 1.1200. 

AudUsd struggled to get above this 0.7900. Stronger March investment lending provided that small push above figure. Talk of buying at 0.7850. Fitch said Australia is not at risk of losing its AAA rating. Aud popped to 0.7916. Our trader Sam  likes to trade long based on interest rates. Spread of the 2-year yields between Aussie and UST is indicating AudUsd up at 0.80. He suggests long Aud with stop under 0.7845. 

Our option trader Matt telling us of very decent UsdJpy option traded through the brokers this morning. An overnight 120.50 strike transaction went through in size and he thinks this spot will probably grind higher. Unfortunately, UsdJpy isn’t going anywhere. Word in the streets that offers are lumpy 120.20-25 with some saying more than 2 yards Usd worth. Weak stops are said to be at 119.80 but don’t get too excited, good bids found near 119.70. 

Earlier, Moody’s downgraded nine Brazilian banks by one notch. According to our LatAm macro strategist  John Welch, he believes there is a high chance Moody will downgrade sovereign ratings. Moody already has a negative outlook on Brazil and is one notch above S&P. 

15:03:29

Asians 
Usd/Asia opened and continued to trade higher post-open. However topside was met with local exporters. 

Korean corporate were said to be selling onshore spot above 1096; high was 1098. Banks were cautious following the government report that said Jpy weakness has created uncertainties for the South Korean economy. 

Local Singapore banks were busily selling UsdSgd near 1.3400. 

Rather eye catching headline in SCMP – China’s foreign exchange retreat may threaten European bond market as much as Greek debt. Article points to China’s foreign exchange reserves, which had their biggest quarterly drop on record in the first three months of the year, now at US$3.73trln. The drop means less demand for assets in dollars and euros from the world’s biggest creditor. This may affect European bond markets just as much as the Greek efforts to win better terms from creditors. 

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