Asian Session – Yen buoyed by safe haven flows, gains limited by Japan trade deficit
January 27, 2014 7:39 am
The sell – off in emerging markets continued to dominate market sentiment as the new trading week got underway. Last week’s risk aversion flowed to today’s Asian session, helping the yen gain on safe haven demand. Meanwhile, the public holiday in Australia today resulted in thin trading volumes. Soft data from China is also keeping sentiment damp as concerns grow over a sharper economic slowdown in the world’s largest economy.
The US dollar fell early in the session to its lowest level against the yen since December, remaining under pressure as US 10-year treasury yields hover at 2-month lows.
Gains in the yen were limited after a report showed Japan recorded a trade deficit in in 2013, reaching 1.15 trillion yen although less than the 1.33 trillion expected.
The dollar bounced back after an early dip to a low of 101.74 and recovered quickly to rise back above the key 102.00 level, ending at 102.48 with a 0.25% gain, slightly above Friday’s highs.
The yen crosses traded a similar pattern, with the euro falling early down to 139.13 before bouncing to 140.19, gaining 0.26%.
The euro was little changed against the dollar, trading sideways within a 20-pip range, with support at 1.3675 and ending the session at 1.3679. German Ifo business confidence data will be in focus later today. This would be the main risk event for the euro today. The Eurogroup meeting is also underway, so any headlines that could affect the euro will be closely watched.
Sterling remains weak after a huge tumble on Friday when the currency was hit by remarks from Bank of England Governor Mark Carney who lessened the likelihood of a rate increase soon. The pound ended the session flat at 1.6503.
The aussie moved off 3-1/2 year lows and managed a bounce to 0.8724, up 0.40% in the session.
The US dollar will be closely watched this week as the Federal Reserve starts a two-day policy meeting tomorrow. Expectations of tighter monetary policy could encourage a shift of funds back to the United States, which would help lift the greenback. Later today, new US home sales will also be in focus.
The sell – off in emerging markets continued to dominate market sentiment as the new trading week got underway. Last week’s risk aversion flowed to today’s Asian session, helping the yen gain on safe haven demand. Meanwhile, the public holiday in Australia today resulted in thin trading volumes. Soft data from China is also keeping sentiment damp as concerns grow over a sharper economic slowdown in the world’s largest economy.
The US dollar fell early in the session to its lowest level against the yen since December, remaining under pressure as US 10-year treasury yields hover at 2-month lows.
Gains in the yen were limited after a report showed Japan recorded a trade deficit in in 2013, reaching 1.15 trillion yen although less than the 1.33 trillion expected.
The dollar bounced back after an early dip to a low of 101.74 and recovered quickly to rise back above the key 102.00 level, ending at 102.48 with a 0.25% gain, slightly above Friday’s highs.
The yen crosses traded a similar pattern, with the euro falling early down to 139.13 before bouncing to 140.19, gaining 0.26%.
The euro was little changed against the dollar, trading sideways within a 20-pip range, with support at 1.3675 and ending the session at 1.3679. German Ifo business confidence data will be in focus later today. This would be the main risk event for the euro today. The Eurogroup meeting is also underway, so any headlines that could affect the euro will be closely watched.
Sterling remains weak after a huge tumble on Friday when the currency was hit by remarks from Bank of England Governor Mark Carney who lessened the likelihood of a rate increase soon. The pound ended the session flat at 1.6503.
The aussie moved off 3-1/2 year lows and managed a bounce to 0.8724, up 0.40% in the session.
The US dollar will be closely watched this week as the Federal Reserve starts a two-day policy meeting tomorrow. Expectations of tighter monetary policy could encourage a shift of funds back to the United States, which would help lift the greenback. Later today, new US home sales will also be in focus.
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