Asia Session

The Asia session belongs to the Aussie Dollar as Reserve Bank of Australia Governor Glenn Stevens spoke of a ''glass half full'' as opposed to a ''glass half empty'' in reference to the Australian economy. Steven's speech was upbeat; stating that the current downturn may not be ''one of the more serious ones of the post-War era'' for the land down under, and that current upside risks will in turn counter the risks to the downside. The reaction in the AUD/USD was swift and serious, as the pair blasted to highs over 0.8285, levels not witnessed since September of 2008 on the news and the hint that rates could be moving higher in due time. Prior to the news the pair had drifted listlessly lower to the tune of 30 pips to just under 0.8200 as Steven's took the podium and sent the pair higher. All Aussie based pair's printed solid gains for the day, pulling the Kiwi and its components higher despite poor trade balance data that hurt that currency early on. The RBNZ will meet on Thursday for its rate decision.

Otherwise, the day was relatively calm, a soft opening in equities sent traders the signal to dump risk assets and take profits. However, as Australia spread the economic optimism, the markets turned around and risk appetite was back in the fold. EUR/JPY shows this progression well, with an early drop off of almost 45 pips to near 135.00, and then the turn around which brought the pair to highs over 135.60. All crosses followed, with the AUD/JPY move obviously more exaggerated as we saw almost a full big figure gain as the pair topped off at 78.80.
USD/JPY did not share the momentum as it wallowed in a 37ish pip range for the day. The Euro and Pound both advanced against the greenback, the EUR/USD capping its gains at 1.4260 and the GBP/USD stalling just short of 1.6510. Talk of a big option barrier at 1.4300 in the EUR/USD has repulsed any move toward that level. Looking ahead to tomorrow, eyes will be focused on the US Treasury auction results as well as the current economic talks between China and the US.

Upcoming Economic Data Releases (London Session) prior expected