The U.S. dollar saw a slight correction in Asia after the strong gains Wednesday in NY trading but fresh weakness in the Shanghai Composite stock index renewed concerns over a further correction in China's stock market bubble. PBOC comments that it would maintain appropriately loose monetary policy was unable to stem profit-taking in stocks in China with pressure emerging in other regional markets including Taiwan and Hong Kong. EUR/USD was bolstered off lows of 1.4009 by buying from China that saw the currency rise to 1.4070 before running out of momentum as regional stocks eased. USD/JPY saw early gains to 95.31 but failed to break above the NY high of 95.36 with the market caught long anticipating large USD fix demand, resulting in a retreat back to 94.83. NZD/USD slumped sharply in early Asia from 0.6580 to 0.6484 after the RBNZ kept rates steady at 2.50% but maintained a dovish tone and warned about the strength of the currency. Commodities were mixed with a slight bounce in gold and copper, correcting losses made Wednesday but with oil easing further and still remaining under $64. Looking ahead, the U.S. auction later Thursday and U.S. GDP on Friday remain the next key focus of the market.
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