The week ended calmly in Asia after a return to risk appetite in the New York session once again put the dollar on the defensive.
Overnight, US GDP data that showed the first quarterly growth in over a year sent equities higher and the riskier currencies skyrocketing as traders aggressively hit dollar bids throughout the day. Those moves were vibrant, and being so, flushed out the market leaving Asia quiet with tight, tired ranges.
EUR/USD just fell shy of 1.4860 in late NY trading after a 150 pip move higher from this time yesterday. In Asia, the EUR/USD failed to revisit that high, but was focused near the 1.4840 level for most of the session.
GBP/USD cruised along the 1.6570 line for the most part, not straying from its 30 pip range.
The slew of Japanese data earlier was mixed, with a weak CPI and a slightly better Unemployment rate failing to either push or pull the Yen. The Bank of Japan's decision to keep the overnight rate at a paltry 0.10% was no surprise and as well, the markets didn't even flinch on the news. As well, month end flows for the Tokyo fix were overhyped and failed to generate any notable moves.
After huge overnight moves in the crosses, the EUR/JPY to the tune of almost two and a half big figures, the pair looked exhausted and sleepwalked its way along the 135.50 level for the day. GBP/JPY was comfortable between 151.00 and 151.50 today after a colossal move that spanned almost four big figures in the past 24 hours. USD/JPY flirted with 91.60, but lost steam to 91.10 levels as the London trade day got underway.
Many traders, although optimistic with the GDP data, are still weary of the fact that a good deal of stimulus spending could be the fuel that propelled the good numbers. That being said, these same traders will now look to tomorrows data in the US, including University of Michigan Consumer Sentiment, Chicago PMI and Personal Spending to see if this recent optimism has teeth. Enjoy the weekend.
