MORNING SLICES (Abbreviated) Fundys – The lack of economic releases in the overnight session failed to prevent the markets from moving significantly with currencies selling off across the board in favor of the flight to safety lure of the Yen and USD .
A G8 meeting will take place in Italy next week (Wednesday to Friday), and interest in the FX market is centring on the Chinese delegation led by President Hu Jintao. In the past week the financial media have reported that China wants a discussion about the USD’s role as reserve currency. Understandably the Chinese are worried about what the US imbalances will mean for the USD in the long term, especially considering that the bulk of China’s FX reserves are invested in USD assets.
The Pound fell over 200 pips following a report that the BoE will announce additional quantitative easing at their upcoming policy meeting.
JPY traded on a firmer footing, with risk appetite waning amid fresh concerns over the global growth outlook after the recent U.S. employment numbers. Ahead of the G8 meeting the dollar’s reserve status is the subject of fresh debate, which has also encouraged a reduction in risky positions and beneficial for JPY due to a general flight to low yield currencies.
GBP experienced downside pressure as risk appetite waned on Monday. Cable fell in Asia and saw good selling early on in the European session to trade at 1.6222 lows, which provided support for EUR-GBP and it traded in to the 0.8600 region
Forex markets traded in narrow ranges in the overnight session as traders saw past the immediate data docket, looking for tomorrow’s FOMC policy announcement…
Price action in the overnight session was reminiscent of price action in Wednesday’s overnight session of trade with currencies once again showing a bid…
Data in the overnight session of trade was light, but this was not reflected in price action which continued to see a flow back into the higher yielding…
The Euro bounced back to reach an intraday high of 1.4243 against the U.S. dollar during the overnight session, and the single-currency may continue to…
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GBP/JPY Sell Recommendation Issued @159.40
