EUR/USD remained steady above 1.2700

AUD/USD

All eyes for the pair were on the Australian jobs overnight given yesterday’s announcement by the Australian Statistics Bureau which saw the body revise down their seasonally Adj. July and August jobs data. In terms of today’s release, employment change printed an 18 month low at -29.7K vs. Exp. 15.5K (Prev. 32.1K) while the unemployment rate remained unchanged at 6.1%. Analysts at Westpac, using their own seasonal adjustment analysis, saw the true figure at approximately -172K. This spurred a counterintuitive move in AUD/USD with the pair initially spiking lower led by algo-selling before recovering losses bolstered by a flurry of hedge fund buying, which actually saw the pair move into the green. Thereafter during European trade, the pair came off these highs and into relatively neutral territory after the USD-index launched a modest recovery from yesterday’s post-FOMC losses.

EUR/USD

The pair started the session off firmly in the green following the dovish FOMC release which led EUR/USD higher by around 39 pips from 1.2656 to 1.2695 before continuing higher and printing a 2-week high. However, this recovery from the recent losses for EUR/USD was short-lived as an amalgamation of a USD recovery and yet more German data weighed on prices. More specifically, today saw the release of the German trade balance (M/M 14.1bln vs. Exp. 17.7bln (Prev. 23.4bln, Rev. 23.5bln)) which once again painted a dismal picture of the fragility of the German economy. As such attention for the pair returned to fears over European growth prospects, although the pair managed to remain steady above 1.2700. Looking ahead, participants will be presented with further insight into the Eurozone economy with the release of Italian and French manufacturing and industrial production figures.

USD/JPY

The pair traded in the red throughout the session following on from the FOMC-minutes release which not only saw the Fed reference the USD strength but highlighted global growth concerns which subsequently supported fixed income products. More specifically, the US 10yr yield fell to it’s lowest level since June 2013 which subsequently provided the pair with further downward momentum amid interest differential flows. Attention for the pair was also placed on the hefty USD 3bln in expiries in the pair at 107.50 which also dictated the state of play for the USD/JPY. Of note, BoJ Governor Kuroda said the BoJ has a lot of options for additional easing and Japan has a lot of financial assets the BoJ could buy, although this didn’t cause any sustained reaction, it could be an important indication of what is to come from the central bank.