JPY sales continue through the day as stimulus expectations fuel gains in stocks
|JPY sales continue through the day as stimulus expectations fuel gains in stocks. GBP relief seen alongside the usual suspects.
Tuesday’s trading theme was primarily based on the Japanese stimulus package, which has been instructed by PM Abe but has come short on details as yet. This proved a temporary hiccup in broad based JPY selling, led by the USD rate which eventually took out resistance levels at 103.50 and 104.00. Strong cross JPY gains followed, fuelled by gains in the respective spot rates - the USD giving back a chunk of the gains seen Monday. Among the risk currencies, AUD and CAD have made decent progress – the former pushing through .7600 and eyeing a move on the pre Brexit highs up at .7665, but struggling a little as the pair comes up against some decent offers ahead of .7650. NZD/USD through .7300 is facing a similar task, while the CAD has managed to pull back towards 1.3000 despite the BoC meeting/risk Wednesday. For GBP, we have seen the oversold status tempered a little, as the market trades off some of the political relief from Theresa May’s appointment to PM. BoE rate cut expectations should kick in from tomorrow, though late in the day, Cable still threatens north of 1.3200 while EUR/GBP eyes sub .8400 despite a resilient EUR/USD rate. Commodities steady through the day, as prices seem to have followed the USD lead. Wall Street still pushing record highs, so NY set to continue the risk on mode.
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