The dollar remained firm in Asia but consolidated with no new direction emerging ahead of the ECB decision later in the day. EUR/USD consolidated between 1.3148-1.3220 in Asia after bouncing off a low of 1.3098 in NY. USD/JPY held a range of 89.25-75 but remained above the NY lows of 88.62 seen in NY despite selling pressure due to the losses in the Nikkei. Option-related positioning continues to contain USD/JPY price action. NZD/USD extended recent trend lows to 0.5335 on weak housing data while the AUD/USD dropped to 0.6658, weighed down by losses in commodities. Asian stock markets were under heavy selling pressure, with some dropping over 5% over the course of the day with different factors behind weakness in each region with commodity prices behind the slide in Australia, HSBC weakness hitting Hong Kong and negative machinery orders weighing on the Nikkei. The stock losses and news that BofA would need billions in capital put pressure on U.S. treasury yields. Weak global demand pushed oil down another $1 at one stage, with crude futures holding under $37.
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