Markets were once again mired to the ongoing battle between risk aversion and risk appetite, with risk appetite claiming the lead for now as the Yen and Dollar were sold as traders looked for better yields from riskier assets. After risk aversion moves hit a bottom early in the day, the moves were all in one direction, as all the majors climbed higher in an orderly and methodical fashion.
With the crosses taking the reigns, the yen slid as the Nikkei tapped a three week high despite mixed equities in the earlier US session. EUR/JPY posted solid gains to the tune of 140 pips as the pair crested above 134.20 as risk aversion retreated. GBP/JPY rose over one and a half big figures to threaten the 155.50 level in one of the more dynamic moves of the session although that pales in comparison to the over three big figure move it's made in less than 24 hours. AUD/JPY and NZD/JPY both made nice gains as well, with highs over 77.00 and 62.20 respectively. The USD/JPY move was accelerated by stops from 93.85 to 94.10, and the pair ultimately landed just above 94.30 for the session high. Rumors of large Japanese investment trust buying of foreign assets helped fuel the moves.
The EUR/USD was also able to post gains for the day after dipping below 1.4200 early the pair gained 50 pips by the end of the day. With UK retail sales looming, the GBP/USD made moderate gains to just short of 1.6500 as traders seemed accepting of overnight commentary from the BoE minutes. Modest gains were seen in the Aussie and Kiwi dollars as well. Traders have a good deal to look forward to in the US tomorrow with both unemployment claims and existing home sales looming and possibly giving the market short term direction.
Upcoming Economic Data Releases (London Session) prior expected
| 7/23/2009 | 8:00 | EC | ECB Euro-Zone Current Account SA | MAY | -5.9B | - - |
| 7/23/2009 | 8:00 | EC | Euro-Zone Current Account nsa | MAY | -9.2B | - - |
| 7/23/2009 | 8:30 | UK | Retail Sales (MoM) | JUN | -0.60% | 0.30% |
| 7/23/2009 | 8:30 | UK | Retail Sales (YoY) | JUN | -1.60% | 2.10% |
| 7/23/2009 | 8:30 | UK | BBA Loans for House Purchase | JUN | 31162 | - - |
