Article by ForexTime
USD/JPY opened in Asia at 104.10. After ticking down to 104.08, it proceeded to edge higher on fresh carry trades favoring AUD, NZD and CAD. USD/JPY traded up to as high as 104.21 before option-related selling capped it. The combination of broad USD strength and a healthy risk appetites should keep carry trade demand strong and USD/JPY well underpinned. Option expiries at 104.20 today look to help contain the price action with more option-related offers ahead of presumed barriers at 104.50. Japanese exporters look less keen to sell on 104 now, perhaps awaiting moves towards 105 and above. Japanese importers look to be staked out now below 104.00. Although most see no change in BoJ policy Thursday, some do hold out hope for further ease. The majority see change only possible after more weak economic data.
EUR/USD opened in Asia at 1.3133 and, after ticking up to 1.3135, fell back with fresh sales absorbing option-related bids at 1.3120-30 and pushing the pair down to 1.3119. Carry trade demand helped with EUR/AUD, EUR/NZD and EUR/CAD all sold. Sentiment remains extremely bearish with the market continuing to add to already large EUR short positions. Uncertainty surrounding the Ukraine-Russia crisis looks to be adding to bearish sentiment as further EU sanctions against Russia will negatively impact the already fragile Eurozone economy. Eurozone PMI data due later today may add to the bearish EUR case.
GBP/USD opened on Monday at 1.6595 and traded a tiny 1.6587-99 range in Asia; last at 1.6598.
USD/CHF opened on Monday at 0.9183 and traded a tiny 0.9183-95 range in Asia; last at 0.9193.
AUD/USD opened in Asia at 0.9326 and traded a modest 0.9318-42 range. The low was seen early before decent bids returned, presumably on fresh carry trades. The two, rather nondescript China PMI releases had little impact as any shorts were pared. Mixed Aussie data also failed to impact. The RBA meeting tomorrow is expected to be a non-event unless Gov Stevens ratchets up verbal intervention. Wednesday’s Q2 GDP release and Thursday’s retail sales and trade data will be eyed with care.
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