CIBC FX FLOWS:
Nzd was the biggest loser this morning, it traded to low of 0.7755 following RBNZ disclosure that the central bank had sold Nzd521mio in month of August. Earlier in the morning, New Zealand PM John Key was speaking in a conference and said Nzd so-called Goldilocks level is 0.65 and it is logical for RBNZ to intervene. That pushed Nzd to 0.7820 from 0.7855. The pressure continued into late morning with Kiwi hitting new low 0.7708.
Move in Nzd dragged the Aud along too; got to 0.8693. We sold decent amount above 0.8730 for US account.
Euro traded on weak side after opening near 1.2700. We cleared through decent bids from 1.2678 to 73, planted in the platforms. Euro bounced back into 80’s after low 1.2667. We should see another layer of bids near 1.2650-60 but hearing stops through 1.2645.
Someone ran stops in Gbp. The pair printed 1.6210 and returned to 1.6240 in a blink.
UsdJpy was bought by the Japanese banks this morning. After we got to 109.52, dollar returned below as Nikkei pared gains. Although some talk of UsdJpy selling for the month-end and half year end, the Yen gurus are not particularly bear. They see 109.20-70 for Asia. Keep lookout for stops at 109.60.
MS.. FX Strategy: Swedish retail sales surprised to the upside coming in at 1.9% (0.7%e, -0.7%p). To put this into context, this is the highest MoM gain since May 2013. Despite this strength, we still believe that the SEK could weaken going forward. This week there are some political risks coming out from Sweden that we will be watching for. Our trade of the week is to buy GBP/SEK at 11.75, with a target of 12.50 and stop of 11.50.