Asian forex market wrap: big falls followed big rallies

Mon, Nov 2 2009, 04:56 GMT
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Some massive moves early in the day were seemingly caused by some 'mis-hits' in either USD/ZAR or ZAR/JPY USD/ZAR rose by over 7% at one stage during the morning according to some interbank players This was followed a big fall in USD/JPY as a ZAR/JPY stop-loss order was triggered and this in turn triggered a host of other stops in pairs like AUD/JPY and GBP/JPY CIT bankruptcy confirmation encouraged risk-averse trading The inevitable steward's enquiry ensued as the ZAR dealings were seemingly tripped off by someone dealing way out of the market when there was no liquidity in early trade. JPY crosses have since recouped all losses and have in fact made some gains as many of the early morning stop-loss fills had to be reversed Regional stockmarkets lose around 2% on average Australian government upgrades economic outlook Australian house prices +4.2% QoQ in the third quarter GBP likely to be impacted by stories regarding High Street banks. Australian inflation gauge eases 0.3% Today was totally dominated by the massive moves (or mis-moves) in the USD/ZAR which created total confusion in the market. EUR/USD remained the most stable of all the pairings and there was talk of Sovereign names buying near the lows of the day around 1.4690. Once the selling was soaked up and the EUR/JPY shorts were forced to cover, EUR/USD rallied swiftly, putting in a high at 1.4771 after earlier lows at 1.4685. Sterling has followed the EUR around today. The AUD/USD was much more volatile, falling swiftly to .8905 as the ZAR confusion reigned. The high this afternoon amid some serious short-covering has been .9050. USD/JPY opened at 90.00 but fell to 89.20 as the JPY cross selling reached a fever pitch in early trade. Once again the short covering has been almost complete and the pair rallied to 90.25 before settling back at its opening level. Markets: Nikkei -2.25%, Kospi -1.4%, HK -1.4%, Sydney -2%. Gold +$5 at $1045.5/oz. Oil +$0.5 at $77.50/bbl

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