Asia Session
Asia Session
October 27, 2009 1:19 AM
The Dollar once again was able to hold on to gains made overnight while the yen soared with a return of risk aversion sweeping through the market. The dollar posted a new high of 1.4770 versus the Euro earlier in NY, and was able to remain in that ballpark through the better part of Asian trade. EUR/USD entered the session near 1.4790, and barely poked over the 1.4820 level for a Asian high in a day short on action.
The British Pound took a hit as news circulated that the government would look to break up and sell off businesses from three banks including Lloyds, RBS and Northern Rock. GBP/USD dropped from highs near 1.6400 and landed near 1.6335 before posting 25 pips worth of gains as the trade day wound down.
CPI out of Australia came in at 1.0%, which was better than the forecast of 0.9%. Traders immediately pushed the AUD/USD from around 0.9180 to 0.9205, but soon profit taking slammed the pair to 0.9130. The ride lower didn’t stop there however; as the pair ultimately hit a bottom of 0.9070 as risk assets were sold off. Many believe that this data will help lock in a rate hike from the RBA next week, the only question is whether it will be 25 basis points or 50 basis points.
With the poor US consumer confidence data and a lackluster day in equities, many investors became hesitant to own high yielding risk assets including commodities and stocks in the face of the possibility of a slow recovery in the US. As this risk aversion swept in it was dramatically apparent in the yen crosses. GBP/JPY was knocked off its 150.40 perch and didn’t hit the ground until 148.90, EUR/JPY shed a solid big figure from 135.95 to 134.95, and AUD/JPY’s fall was perhaps most dramatic as it cascaded from near 84.35 to 82.70 levels. Against the dollar, the yen posted a 70 pip gain to 91.10 dollars per yen.
Some imperative data to look ahead to including US Durable Goods and New Home Sales, and early in the Asian morning, the Reserve Bank of New Zealand will be announcing their cash rate. All indications are that the RBNZ will leave rates unchanged at 2.50%, at least until early 2010.
Data Releases (London Session) prior expected
|
10/28/2009
|
7:00
|
GE
|
Import Price Index (MoM)
|
SEP
|
1.30%
|
-0.70%
|
|
10/28/2009
|
7:00
|
GE
|
Import Price Index (YoY)
|
SEP
|
-10.90%
|
-10.70%
|
|
10/28/2009
|
|
GE
|
Consumer Price Index (MoM)
|
OCT P
|
-0.40%
|
0.10%
|
|
10/28/2009
|
|
GE
|
Consumer Price Index (YoY)
|
OCT P
|
-0.30%
|
0.00%
|
|
10/28/2009
|
|
GE
|
CPI - EU Harmonised (MoM)
|
OCT P
|
-0.50%
|
0.10%
|
The Dollar once again was able to hold on to gains made overnight while the yen soared with a return of risk aversion sweeping through the market.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
