Previous session overview
The dollar fell against the yen in Asia on Tuesday as recent remarks by Federal Reserve officials and declining short-term U.S. Treasury yields led investors to the view the Fed won't raise its key policy rate soon.
The dollar fell to JPY90.94, its lowest level since Feb 18. The greenback may fall further due to automated stop-loss selling orders, although it will likely hold above JPY90.00 on buying from Japanese trust funds, dealers in Tokyo said.
Earlier in the Asian session, the euro spiked against the Swiss franc to CHF1.4684 from CHF1.4630. Dealers in Tokyo said speculators bought amid talk in the market the Swiss National Bank had been buying. Traders added that they hadn't seen the SNB's name on trading screens, but the central bank was spotted bidding the euro/franc cross in Asian hours Feb. 5, sending it sharply higher at the time.
Non-Japanese hedge funds, meanwhile, were selling dollars on the growing belief the Fed's hike to its discount rate Thursday wasn't a signal of near-term policy tightening, dealers said.
At 0715 GMT, the euro was at USD1.3672, from USD1.3597 late in New York Monday, while the dollar stood at JPY90.90 compared with JPY91.13 in New York Monday.
The Australian dollar fell slightly against the yen and was roughly flat against the U.S. dollar Tuesday as investors paused before key central bankers' speeches both domestically and abroad.
Market expectation
EURUSD is probing above USD1.3680, where earlier reports placed stop interest, but upside still seen a labored effort. If rate can clear above here seen opening a move toward USD1.3700/10 (USD1.3707 76.4% USD1.3789/1.3443). Traders note that a decent directional player has been seen buying dollar-Swiss around the CHF1.0730 level which may add to euro-dollar resistance.
Pound stops triggered on the break above USD1.5560, with rate lifting on to USD1.5574. Next sell interest seen placed toward USD1.5600 (USD1.5598 76.4% USD1.5675/1.5350), with stops noted on a break above. Rate currently trades around USD1.5570.
European stock markets are expected to start tentatively higher Tuesday, as investors shift into 'wait and see' mode, pending further developments on the Greek debt situation and the U.S. Federal Reserve's monetary outlook.
Investors will be looking for hints as to when the Fed might raise its far more important Federal funds rate, which governs overnight intra-bank lending and is now a record low zero to 0.25%.
In the near term, market participants said they were focused on a speech by Reserve Bank of Australia Deputy Governor Ric Battellino due later Tuesday. Coupled with capital expenditures data on Thursday, Battellino's speech should provide some insight into the RBA's next interest rate decision set for March 2.
Most important events of the day
| 23-Feb | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | IS | Gallup Expectations | Feb | index | Low | 37.1 | ||
| 0:00 | WLD | WTO General Council meeting (22nd-23rd) | Low | |||||
| 0:00 | US | St. Louis Fed President Bullard gives speech on "Will Regulatory Reform Prevent Future Crises?" before the Chartered Financial Analysts Virginia Society | Low | |||||
| 0:00 | EU | European Banking Supervisors committee hold hearing on new EU bank capital requirement rules | Low | |||||
| 0:00 | WLD | OECD Secretary General Gurria gives speech in Madrid | Low | |||||
| 7:00 | FI | Unemployment | Jan | % rate | Low | 7.9 | ||
| 7:00 | CH | UBS Consumption Indicator | Jan | index | Med | |||
| 7:00 | AU | RBA Deputy Governor Battellino gives speech in Sydney | Low | |||||
| 7:15 | EU | ECB Governing council member Fernandez Ordonez gives speech on "the Reform of the Spanish Financial System" | Low | |||||
| 7:45 | FR | Consumer Spending | Jan | % m/m | Low | -2.7 | -1.1 | 1.3 |
| 7:45 | FR | Consumer Spending | Jan | % y/y | Low | 3.6 | 5.9 | |
| 7:45 | FR | CPI | Jan | % m/m | Med | -0.3 | 0.2 | |
| 7:45 | FR | CPI | Jan | % y/y | Med | 1.1 | 0.8 | |
| 7:45 | FR | HICP | Jan | % m/m | Med | -0.2 | 0.3 | |
| 7:45 | FR | HICP | Jan | %y/y | Med | 1.3 | 1 | |
| 8:30 | NL | Producer Confidence | Feb | index s.a | Low | -6.9 | -7.5 | -8.3 |
| 8:30 | IT | ISAE Consumer Confidence | Feb | index | Low | 111.7 | 111.7 | |
| 9:00 | DE | IFO Business Climate | Feb | Index | High | 96.1 | 95.8 | |
| 9:00 | DE | IFO Current Conditions | Feb | Index | High | 91.9 | 91.2 | |
| 9:00 | DE | IFO Expectations | Feb | Index | High | 100.5 | 100.6 | |
| 9:00 | IT | CPI (F) | Jan | % m/m | Low | 0.1 | 0.1 | |
| 9:00 | IT | CPI (F) | Jan | % y/y | Low | 1.3 | 1.3 | |
| 9:00 | IT | HICP (F) | Jan | % m/m | Low | -1.4 | -1.4 | |
| 9:00 | IT | HICP (F) | Jan | % y/y | Low | 1.4 | 1.4 | |
| 9:15 | GB | BoE MPC board members King, Bean, Dale, Miles and Barker to testify before the Treasury on Feb 2010 Inflation Report | Low | |||||
| 9:30 | GB | BBA Mortgage Approvals | Jan | K | Med | 45.897 | ||
| 11:00 | GB | CBI Distributive Trades | Feb | Index | Med | -8 | ||
| 12:10 | GB | BoE Deputy Governor Tucker gives speech at 27th annual State of the Economy conference | Low | |||||
| 14:00 | BE | BNB Business Sentiment | Feb | Index | Low | -6.6 | -7 | |
| 14:00 | US | S&P Case-Shiller Home Price | Dec | % y/y | Low | -3 | -5.3 | |
| 15:00 | US | Consumer confidence | Feb | index | High | 55 | 55.9 | |
| 19:00 | US | House Financial Services Committee holds a hearing "Prospects for Employment Growth: Is Additional Stimulus Needed?" | Low | |||||
| 23:50 | JP | CSPI | Jan | index | Low | -1.1 | -1.5 | |
| 23:50 | JP | Customs Cleared Trade | Jan | Y bn | Low | 136 | 544.2 |
