Early signs of risk appetite were squashed as Chinese equities slid due to comments out of China's Ministry of Industry stated that there will be a three year moratorium on approvals of any new expansion related proposals in the steel and iron industries. In a session that looked like a further extension of Dollar weakness, a late turn around and saw the both the Dollar and the Yen make gains on risk aversion.
EUR/USD, which opened close to 1.4290 made an early push over the 1.4300 big figure. The pair lost its footing as the Chinese data was digested, dropping the pair to lows near 1.4255. GBP/USD made a quick 20 pip run to over 1.6600, but like the Euro, made a late slide to just north of 1.6550. The Aussie Dollar had a great run higher as RBA Governor Glenn Stevens made it very clear in a statement today that the current 3.0% rate in Australia will be higher sooner than later. The AUD/USD posted 11 month gains to 0.8477, but the elation was short lived as Australia is a key exporter of raw materials to China, so the blow from the China news was swift. AUD/USD eventually dropped to session lows near 0.8410 as risk aversion reared its head once again. Any data that tends to cloud the sunny image of global recovery sends traders in a risk avers mode, selling the likes of the Aussie Dollar and buying Dollars and Yen.
Speaking of the Yen, the Japanese currency made moves higher late in the day; USD/JPY shed 45 pips from its high to hit 95.10 in thinned Yen trading due to the Japanese Oban holiday. The yen cross moves were solid, GBP/JPY dropped a full big figure from 158.40 highs to just shy of 157.30. EUR/JPY lost ground near 136.40 and came close to hitting 135.50 on a low but fell short. The week wraps up with US CPI data tomorrow. Have a nice weekend.
Upcoming Economic Data Releases (London Session) prior expected
| 8/14/2009 | 6:45 | FR | Non-Farm Payrolls (QoQ) | 2Q P | -1.20% | - - |
| 8/14/2009 | 9:00 | EC | Euro-Zone CPI (MoM) | JUL | 0.20% | -0.60% |
| 8/14/2009 | 9:00 | EC | Euro-Zone CPI (YoY) | JUL | -0.60% | -0.60% |
| 8/14/2009 | 9:00 | EC | Euro-Zone CPI - Core (YoY) | JUL | 1.40% | 1.30% |
