FX Flows

From the FXWW Chatroom: Aussie dollar slipped from 0.7360 to 0.7340 following the MSCI announcement. The MSCI announcement didn’t come as a surprise. They will delay till 2017 market classification review. But should there be positive developments, MSCI said it does not rule a potential off-cycle announcement.

Our trader Sam believes this MSCI news will weigh on stocks thus AudUsd should stay under pressure, but AudNzd rather since yesterday’s release of Kiwi Food Prices. AudNzd advanced to 1.0545 then release of Westpac June consumer confidence sent the cross back to 1.0520.

Aussie traded down to 0.7334. Performance of the Shanghai stock market had the AudUsd returning to 0.7360.

Come tomorrow, we will have Kiwi Q1 GDP growth and then, the Aussie May jobs report.

UsdCad stayed bid after the API report that crude inventories up 1.16mio barrels. No bounce seen in oil futures plus an offered AudUsd supported the UsdCad. However, market is facing a challenge because the 55-Day SMA at 1.2882, as highlight by Toronto colleague earlier. Offers are light at moment, thickens into 1.2920’s. UsdCad printed 1.2879 then backed off as the Aussie firmed.

The UsdJpy was given a knock on the MSCI decision. Tokyo banks were better buyers due to Goto-bi Day and took the UsdJpy into the 106-teens. There is a vague talk of better buying in the 105.70’s coming from one “who should not be named”. Nikkei 225 recovered from negative to positive, following the Chinese.

It was all EurJpy play that dominated the EurUsd. Printed low 1.1189 and we hear bids gather 1.1170-80, plenty of gamma play. Two option strikes will roll off tomorrow. Strike at 1.1100 for about Eur1.2bn and 1.1000 strike for Eur1.65bn.

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