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Market Session Recaps

Asia Session

Tue, Oct 20 2009, 06:25 GMT
by Forex.com Research Desk

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The Dollar's woes continued once again today in Asia as it hit new lows for 2009. The causes for the fall differed, with many traders citing the fact that interest rates in the US look to remain low into 2010 while conversely, the RBA minutes showed a hawkish stance that could see rates raised two more times before the year's end. Added to this mix were higher equities in the US, and that wave of optimism and opportunity that spilled over into Asian equity trading.

The EUR/USD posted a 14 month high just over 1.4990 but didn't have the push to get through the psychological 1.5000 level, which looked to be a solid resistance level heading into London. The lack of any meaningful comments out of the Euro Zone Finance Ministers Meeting in Luxembourg prompted traders to reenter long Euro positions that were abandoned yesterday as a precaution to avoid potentially wild moves due to comments out of the meeting.

With US stocks soaring due to stronger earnings, traders continued to buy into riskier assets, most notably commodities. With gold topping $1067.00 and WTI Crude Oil futures hitting a yearly high north of $80.00 per barrel, the risk currencies were well supported throughout the session.

AUD/USD benefitted greatly from a combination of the rush to risk and the RBA commentary stating that it was ''imprudent'' to keep interest rates low, as it hit a fresh high for 2009 at the .9310 level. At the rate the market has been moving; last year's 0.9800 levels in the Aussie Dollar don't look too farfetched. AUD/NZD made a firm move from early 1.2250 lows to hit highs in the 1.2325 ballpark.

The Yen strengthened across the board as Japanese Finance Minister Fujii commented once again that the move was not yen strength but to a softer dollar, "You can't deny the fact that current yen strength is stemming from dollar weakness," he was quoted as saying. The yen crosses all pulled off of early session highs, the EUR/JPY dropping a full handle to 134.85, GBP/JPY sliding over 120 pips from near 148.95 to 147.70 lows, and the CHF/YEN slipping from 2 month highs of 89.75 to hit ground at 89.10. USD/JPY retreated from a high near 90.80 to 90.10 levels as London session traders awoke for the new trade day.

While the London session is light on data, New York will bring about Building Permit and PPI data followed by the Bank of Canada rate decision all before 9:00 AM EST.

Published on  Tue, Oct 20 2009, 06:32 GMT

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