Forex Market
Asia FX Rundown
News and markets Hong Kong and India on holiday today. The votes are being counted in the Mexican presidential and congressional elections held yesterday.
EUR Analysis
Opened at $1.2578 after $1.2433/1.2628 overnight range, EUR had gapped higher in Asian dealings on apparent progress at the EU Summit, forcing a short-covering scramble ahead of quarter-end, but pair had deflated from highs after talk of Asian sovereign sales.
JPY Analysis
Opened at Y79.47/99.97 after Y79.18/74 and Y98.56/100.50 overnight ranges, USD/JPY was underpinned by a EUR short-squeeze that lifted EUR/JPY, though both pairs had relinquished some gains ahead of the US session.
Asian Currencies Technicals
AUD/USD: Shift in focus targets April highs. Close above the key $1.0220 level sees focus on a higher levels targeting the $1.0469 April monthly highs with a close back below the $1.0150 level needed to shift immediate focus back to the parity region.
Pre ECB: What’s next, Mr. Draghi?
ECB MEETING 05 JULY – EXPECTED OUTCOME ECB monetary policy strategy: Unchanged ECB policy interest rates: Unchanged Economy: Downside risks predominating Inflation: Decelerating slowly
Short EUR/AUD – Positioning for further downside
Improving global risk sentiment and widening Australia-eurozone interest rate differentials will likely place further downward pressure on EUR/AUD, in our view.
EUR: EU Summit is not a game-changer for the EUR
Summary: No new innovations, but agreement to utilise the EFSF/ESM to support sovereign debt under an MoU; attention now turns to whether the leaders can agree on a ‘roadmap’ today.
FX Ringside
SEK was our favored currency in the latest Currency Strategy and over the past 5 weeks EUR/SEK has fallen more than 4%. We continue to expect a stronger SEK over time but EUR/SEK has now moved beyond our Q3 target and the move lower looks a bit overdone short-term.
JPY Analysis
Opened in early Europe at Y79.45 and Y100.05, EUR/JPY was the stand-out in Asian trade Friday, powering higher as EU officials outlined some short-term fixes for the Spanish and Italian borrowing cost issues.
GBP Analysis
Opened early Europe at $1.5630, stg0.8060, closed in NY at $1.5520, rate recovered from pullback lows of $1.5485 in late dealings. Cable ground higher in early Asian trade albeit stuck in a tight 30 pip range, before spiking sharply in tandem with EUR/USD to highs of $1.5628 as headlines from the EU summit began to […]
EUR Analysis
Opened early Europe at $1.2600, closed in NY at $1.2440, rate recovered from $1.2414 lows in late trade. The euro opened flat before spiking in Asian afternoon trade, as risk appetite picked up in the wake of comments from EU officials.
Australia and New Zealand Weekly: The carbon tax and inflation
The carbon tax starts on 1 July and should add 0.7pp to the CPI. This matches RBA and Government forecasts, although we estimate a larger 0.5pp boost to underlying inflation. The risk is that the boost to the CPI is larger, although with some delay.