The Japanese yen had a weak start in Asia on Wednesday, which moved back from peaks several months now. The emerging markets stabilized and the stocks rallied, while the Australia dollar took a break from a powerful rally.
The US dollar jumped to ¥101.63 and the euro incurred to ¥137.33, both going away from 11-week lows of ¥100.75 and ¥136.25, respectively.
BNP Paribas analysts remained on guard about entering again long dollar/yen positions, instead they preferred waiting for further hints of stabilization in the risky environment.
“Opinions remain divided on whether the Tuesday rally (in risk assets) is anything more than a dead cat bounce,” they said to the clients.
The euro was slightly softer at $1.3516 against the US dollar, which holds almost a two-month low of $1.3476 despite warning that the European Central Bank (ECB) might become more dovish in its policy review on Thursday.
With inflation running well below the ECB’s postulation and the specter of deflation clenching the euro zone, the ECB is under pressure to do more to enliven its weak recovery.
However, the Australian dollar was the show stopper as it surged throughout the board, following the Reserve Bank of Australia sank its bias to trim interest rates and toned down its rhetoric versus the currency.
The new stance shocked some and sparkled a deep short-covering rally that saw the Aussie ascend versus the yen, dollar, euro, and almost every other major currency.
The Aussie bounced $0.8920, after a 2% rally and listed at ¥90.76, having increased 2.7% in its biggest one-day move in 10 months. The euro went low at 2% to A$1.5135.
Traders noted the close above 89 US cents was enticing and could fire a bullish trend reversal that should mount the way for a retest of this year’s high at $0.9087 set on January 13.
However, some analysts anticipated the Aussie’s longer-term downturn will remain intact.
“We will maintain long-term bearish outlook for the AUDUSD as the Federal Reserve moves away from its easing cycle,” said DailyFX Currency Analyst David Song.
Against New Zealand fellow, the Aussie went up NZ$1.0948 but has since removed most of the gains to be back almost NZ$1.0800.
With the Reserve Bank of New Zealand considered all but sure to raise interest rates in March, investors were hesitant to bet versus the kiwi dollar.
Concreting the central bank’s hawkish position, data released on Wednesday showed firm jobs growth in New Zealand and an gain in the number of people actively searching for work.
The optimistic data sent the kiwi to a one-week peak versus the US dollar at $0.8259.
The material has been provided by InstaForex Company – www.instaforex.com
The Japanese yen had a weak start in Asia on Wednesday, which moved back from peaks several months now. The emerging markets stabilized and the stocks rallied, while the Australia dollar took a break from a powerful rally.
The US dollar jumped to ¥101.63 and the euro incurred to ¥137.33, both going away from 11-week lows of ¥100.75 and ¥136.25, respectively.
BNP Paribas analysts remained on guard about entering again long dollar/yen positions, instead they preferred waiting for further hints of stabilization in the risky environment.
“Opinions remain divided on whether the Tuesday rally (in risk assets) is anything more than a dead cat bounce,” they said to the clients.
The euro was slightly softer at $1.3516 against the US dollar, which holds almost a two-month low of $1.3476 despite warning that the European Central Bank (ECB) might become more dovish in its policy review on Thursday.
With inflation running well below the ECB’s postulation and the specter of deflation clenching the euro zone, the ECB is under pressure to do more to enliven its weak recovery.
However, the Australian dollar was the show stopper as it surged throughout the board, following the Reserve Bank of Australia sank its bias to trim interest rates and toned down its rhetoric versus the currency.
The new stance shocked some and sparkled a deep short-covering rally that saw the Aussie ascend versus the yen, dollar, euro, and almost every other major currency.
The Aussie bounced $0.8920, after a 2% rally and listed at ¥90.76, having increased 2.7% in its biggest one-day move in 10 months. The euro went low at 2% to A$1.5135.
Traders noted the close above 89 US cents was enticing and could fire a bullish trend reversal that should mount the way for a retest of this year’s high at $0.9087 set on January 13.
However, some analysts anticipated the Aussie’s longer-term downturn will remain intact.
“We will maintain long-term bearish outlook for the AUDUSD as the Federal Reserve moves away from its easing cycle,” said DailyFX Currency Analyst David Song.
Against New Zealand fellow, the Aussie went up NZ$1.0948 but has since removed most of the gains to be back almost NZ$1.0800.
With the Reserve Bank of New Zealand considered all but sure to raise interest rates in March, investors were hesitant to bet versus the kiwi dollar.
Concreting the central bank’s hawkish position, data released on Wednesday showed firm jobs growth in New Zealand and an gain in the number of people actively searching for work.
The optimistic data sent the kiwi to a one-week peak versus the US dollar at $0.8259.
The material has been provided by InstaForex Company – www.instaforex.com
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