Some NY session deja-vu as risk aversion was once again back in full force. Concerns about global growth were apparent as China ostensibly canceled a large order of coal from a major trading partner. Equity marts managed to crawl back to respectable levels but were extremely heavy throughout the span and this weighed on so-called risky currencies. Traders flocked to the yen for no other reason than to unwind carry trades on the back of the selloff in shares.
EUR/JPY saw an impressive move from an intraday high 132.10 to a low of 127.02 as the S&P tested the 870 level – twice. USD/JPY squeezed down into the 91.80 depths but managed to rebound one big figure to close near 92.80/90. Better earnings from a major US aluminum company could help support risky assets as we head into the overnight sessions, keeping the yen crosses better bid.
The commodity complex continued to grind lower as oil came off the boil some more, making a low one penny above the $60 support level. Gold sank more than $15 towards 910/909 as jewelry demand ostensibly continued to dry up. Look for better buyers into the 900 level here. The commodity plunge saw the currencies of the resource-based economies take a dive. USD/CAD shot up towards a 1.1725 high before resolving lower towards 1.1660 ahead of the close. AUD/USD meanwhile sank to 0.7724 before reversing into the 0.7800 zone.
