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Yen Gains on Haven Flows as Chinese Stocks Drop Most in Five Years

Yen Gains on Haven Flows as Chinese Stocks Drop Most in Five Years

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • Yen Gains on Haven Flows as Chinese Shares Slump on Lending Restrictions
  • Swiss Franc Continues to Correct Lower After Last Week’s SNB-Driven Jump
  • See Economic Releases Directly on Your Charts with the DailyFX News App

The Japanese Yen outperformed in overnight trade, rising as much as 0.8 percent on average against its leading counterparts. A sharp selloff on Chinese stock exchanges appeared to fuel demand for the safety-linked currency. The Shanghai Composite equity benchmark index fell in excess of 6 percent – yielding the largest decline in five years – after regulators moved to restrict margin lending.

The China Securities Regulatory Commission said it has suspected borrowing of money and stocks by the clients of the country’s leading brokerages including Citic Securities, Haitong Securities and Guotai Junan Securities Co. The move appeared to fuel fears of an exodus of capital from Chinese shares.

The Swiss Franc traded lower as prices continued to digest last week’s breakneck volatility. The currency declined as much 0.8 percent against the majors having soared to multi-year highs against the spectrum of G10 alternatives last week after the Swiss National Bank unexpectedly scrapped its three-year-old Swiss Franc cap of 1.20 against the Euro, saying the “exceptional and temporary measure…is no longer justified.”

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Asia Session

GMTCCYEVENTACTEXPPREV
23:30AUDTD Securities Inflation (MoM) (DEC)0.0%-0.1%
23:30AUDTD Securities Inflation (YoY) (DEC)1.5%-2.2%
0:01GBPRightmove House Prices (MoM) (JAN)1.4%--2.2%
0:01GBPRightmove House Prices (YoY) (JAN)8.2%-7.0%
0:30AUDNew Motor Vehicle Sales (MoM) (DEC)3.0%--0.5%
0:30AUDNew Motor Vehicle Sales (YoY) (DEC)-1.0%--3.7%
4:30JPYCapacity Utilization (MoM) (NOV)-0.7%
4:30JPYIndustrial Production (MoM) (NOV F)--0.6%
4:30JPYIndustrial Production (YoY) (NOV F)--3.8%
5:00JPYConsumer Confidence Index (DEC)38.837.7

European Session

GMTCCYEVENTEXPPREVIMPACT
8:15CHFProducer & Import Prices (YoY) (DEC)-0.8%-1.6%Low
8:15CHFProducer & Import Prices (MoM) (DEC)-2.4%-0.7%Low
9:00EUREurozone Current Account sa (NOV)-€20.5BLow
9:00EUREurozone Current Account nsa (NOV)-€30.6BLow
10:00EUREurozone Construction Output (MoM) (NOV)-1.3%Low
10:00EUREurozone Construction Output (YoY) (NOV)1.4%Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.11811.13701.14691.15591.16581.17481.1937
GBPUSD1.48331.49931.50721.51531.52321.53131.5473

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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