MORNING BRIEFING: Yen near 15-year peak while Euro slumps to record low versus franc

What’s new:
Forex: Yen steady as traders test Japan’s willingness to intervene
Asia: Japan leads Asian stocks down, with US economy in focus
Australia: Aussie rises on stronger than expected retail sales
Japan: Finance Minister Noda says decisive steps on currencies when needed
Euro zone: Euro hits record low versus Swiss franc

Today:


Asian Rates & Indices:
EURUSD: 1.2672 - 1.2628.
USDCHF: 1.0265 - 1.0223.
GBPUSD: 1.5475 - 1.5407.
EURJPY: 107.20 – 106.18.
USDJPY: 84.66 – 84.06.
DowJones: 10'009.73 -1.39%
NASDAQ: 2'119.97 -1.56%
S & P 500: 1'048.92 -1.47%
Nikkei: 8’824.06 -3.55%
Shanghai: 2'637.60 -0.57%
Gold: $ 1'234.90
Crude Oil: $ 73.59

Comments:

The Yen hovered near a 15-year high versus the US dollar early on Tuesday, as traders are looking to test Financial authorities’ resolve on intervention. The Bank of Japan took further easing steps on Monday, however failing to scare the markets from betting against the Yen.

With the US economy in focus, Japan led Asian stocks in negative territory on Tuesday, with profit-taking feeding a rally in US and Japanese government bonds. Policymakers around the world remain cautious about adding new stimulus, thus giving rise to risk aversion. Gold prices are up almost 5 percent in August. Investors are focusing on US employment data due later in the week as a disappointing number in payrolls will almost certainly depress markets further placing more upward pressure on the yen.

Increasing US economic worries are seen keeping investors shunning risk assets such as high-yielding currencies. Therefore markets are likely to push up the low-yielding yen, which could eventually prompt Japan to sell the yen in currency markets for the first time in more than six years.

Japanese Finance Minister Yoshihiko Noda repeated on Tuesday that the government would take decisive action on currencies when necessary.

The Australian dollar jumped about 0.3 percent to 0.8956 earlier following stronger-than-expected Australian retail sales and building approvals data. Meanwhile the Euro continues to trade lower, down 0.6 percent so far to 1.2912 versus the Swiss franc. This is another sign of investor risk aversion; the euro slumped to a record low against the safe-haven Swiss franc on big selling from emerging market players.

Good Day,

Emman Xuereb
Trading Desk
RTFX Ltd
Risk Disclaimer





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