General Commentary
Last week’s currency trading review
The USD/JPY surged for most of the week on anticipation of new leadership at the weekends elections. The pools were correct and Abe’s LDP Coalition took a 2/3 majority and the USD/JPY gapped higher on Monday above Y84 although we have moved back below at the time of writing. The challenges now are to change the BOJ targets to 2% inflation and be aggressive in their easing to achieve this target.
The EUR/USD broke to year highs above 1.3180 on the back of heavy EUR/JPY buying and a continuation of the FED bond buying program at the same level. EUR/JPY has traded as high as Y111 in Asia which is telling given we were below Y100 only a few months ago. The outlook is for more Euro buying now that tail risk of Greece or Italy/Spain leaving the Eurozone has diminished substantially.
Currency Movement last week
EUR/USD was down +1.80% closing at 1.3161, after opening the week at 1.2924.
USD/JPY was down +1.25% closing at 83.50, after opening at 82.46.
GBP/USD was down +0.82% closing at 1.6167 after opening at 1.6035.
AUD/USD was +0.73% closing at 1.0564 after opening at 1.0487.
