Asia Session

Despite an overall positive market sentiment, the FX markets leaned in favor of risk aversion today due to poor after hours earnings in the US from Microsoft, Amazon and American Express. Traders flocked to buy up the Yen despite Asian stocks rising for a ninth consecutive day, as many saw the riskier assets as overbought against the Japanese currency and took advantage of this fact in stride. Although trading near 135.60 only 12 hours ago, Asia witnessed the EUR/JPY pair drop from an early surge of 134.80 to lows a touch higher than 133.80.
As is usually the case, other crosses followed the same path, with GBP/JPY dropping over a big figure from its session high near 157.15 to its ensuing low which dipped under the 156.00 level. AUD/JPY and NZD/JPY followed the lead lower, and then late in the session tagged along as the crosses all reversed higher heading into London trading. The spark for the reversal looked to be South Korea's strong growth, which showed GDP moving at the fastest pace in six years.

The Dollar remained languid against most currencies with the exception of the Yen, as USD/JPY made a healthy move from 93.55ish lows to just over 94.30 on the day. Most other currencies were trading sideways in a lazy Friday in summer type fashion, with EUR/USD stuck in a 35 pip range near 1.4140/70 ahead of important German Ifo data later in the day.
GBP/USD had an early 50 pip pop to 1.6520, but in due course melted back to levels near 1.6480. The Aussie and Kiwi dollars made slight gains of 30 and 20 pips against the greenback respectively. Traders now will look to see how Wall Street ends the week tomorrow and to see if either Fed Chairman Bernanke or Secretary of the Treasury Geithner has anything market moving up their sleeves as they will both be speaking to close out the trade week in New York. Have a nice weekend.

Upcoming Economic Data Releases (London Session) prior expected