Currency Updates:
AUD/USD Europe dumped the pair after offers in the 0.7830/50 zone proved too chunky. The slide saw the pair near 0.7800 as NY got going. NY applied bear pressure as well as US bond yield added to gains from yesterday. AUD/USD steadily slipped lower in NY and pierced the 10-Day MA. A low of 0.7774 was then hit but no further losses were possible. The pair lingered near the low into the Fed minutes. The dovish lean had the USD offered across the board. AUD/USD spiked up, pierced the 21-Day MA and hit a high of 0.7840. Very little pullback was seen and the pair lingered near the high late in the day. There is no Oz data to drive the pair in Asia so external factors will be leading. Further deterioration in US yields likely see the key 0.7880/0.7910 resistance zone tested. A break likely leads to a decent short squeeze.
EUR/USD Europe weighed the pair down as the USD was broadly bid. They slipped the pair from the 1.1415 area towards 1.1385 at NY’s open. NY applied further bear pressure as the market ignored the onslaught of Greek headlines and instead focused on rising US bond yields. Treasury yields added to gains from yesterday and this helped spreads widen further and push EUR/USD below the 10 & 21-DMAs. A low of 1.1334 was hit shortly before it was DJN Greece was given an ELA extension of two weeks. Reuters then reported a bit later that Greece’s CB requested 5bln EUR but was only given 3.3bln. The big move came after the Fed minutes. The Fed leaned dovish and stated many policymakers leaned towards leaving rates lower for longer due to weak inflation and other concerns. The Fed wants more evidence of continued growth & signs inflation will rise before hiking. EUR/USD spiked up on the news. A high of 1.1416 was hit as the USD and US bond yield tumbled. A late day bounce for the greenback saw the pair near 1.1385 late in the day.
USD/JPY It was a fairly quiet session for the yen after the BOJ left policy unchanged o/n, but all that changed when the FOMC Minutes revealed a far more “Patient” committee than most expected. USD/JPY tumbled in sympathy with USD/JPY yield spreads, as pending Fed tightening were priced out. USD/JPY made new session lows on the news, getting below bids by the Tenkan at 118.82. Bids into 118.50 holding so far since then, but the steady downside misses in US econ data since the stellar Jan Jobs report may now be given greater heed. Minutes showed foreign CB easing seen as a positive development easing “international” risk, which may give the BOJ more space to ease later this year, but for now the focus is on the Fed and ECB. The latter extended the ELA to Greece for two-wks, but only upped the amount E3.3b to E18.3b. EUR/JPY couldn’t capitalize on that and is by session lows heading toward the NYSE close. Next decent support is at 134.50 and 134. GBP/JPY’s post UK labor data surge was rejected by the 61.8% at 184.23, with the post FOMC USD/JPY dive weighing on crosses. AUD/JPY capped again by Kijun & 50% at 93.35. JPY Trade Thur.
Looking Ahead – Economic Data (GMT)
• 23:50 JP Foreign Bond Inv w/e 199.5b-prev
• 23:50 JP Foreign Invest JP Stock w/e -477.1b-prev
• 23:50 JP Exports YY* Jan f/c 11.9%, 12.90%-prev
• 23:50 JP Imports YY* Jan f/c -4.8%, 1.90%-prev
• 23:50 JP Trade Bal Total Yen* Jan f/c -1690.8b, -660.7b-prev
• 21:45 NZ Prod Prices – Inputs QQ* Q4 -1.50%-prev
• 21:45 NZ PPI Output* Q4 -1.10%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
