News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Silver: 0.79% Gold: 0.49% Oil - US Crude: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/piPjZBulsC
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in NZD/USD are at opposite extremes with 67.03%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/n7ndExFIaG
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/qg1uMXcmx8
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: US 500: 0.17% Germany 30: 0.08% France 40: 0.07% Wall Street: 0.04% FTSE 100: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0M3Lwae8uH
  • The British Pound nudged higher over the week across the board and this pattern is expected to continue in the weeks ahead as traders watch the UK’s Covid-19 vaccination plan. Get your $GBP update from @nickcawley1 here: https://t.co/OvFP8Zzz5b https://t.co/2TSLOehS4M
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in NZD/USD are at opposite extremes with 66.83%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ElMUYZ7p9R
  • The rest of the New York trading session is absent major scheduled event risk with US markets closed for the Martin Luther King Jr holiday. There is always a risk of unscheduled developments
  • Commodities Update: As of 17:00, these are your best and worst performers based on the London trading schedule: Silver: 0.50% Gold: 0.41% Oil - US Crude: -0.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/eXSdZgvVeB
  • Despite China's better-than-expected 6.5% 4Q GDP report, $USDCNH is still up on the day. There is strong external influence on this rate, but Dollar still exerts the greater pressure. If it breaks 6.50 and Biden keeps pressure on China trade, I'll be watching https://t.co/5W5tcfeTZ5
  • Forex Update: As of 17:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.19% 🇨🇭CHF: 0.05% 🇪🇺EUR: -0.02% 🇨🇦CAD: -0.16% 🇦🇺AUD: -0.25% 🇳🇿NZD: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/BrmnTuolx0
JPY Reverses Hard against AUD, NZD as Chinese Liquidity Concerns Arise

JPY Reverses Hard against AUD, NZD as Chinese Liquidity Concerns Arise

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Post-NFP rally over as attention shifts immediately to Asia.

- Yen boosted by weak NFP and by Chinese liquidity concerns.

- Big picture: Fed QE3 taper expectations continue to dissolve.

To receive this report in your inbox every morning, sign up for Christopher’s distribution list.

INTRADAY PERFORMANCE UPDATE: 09:45 GMT

MAJORS

AUD

CAD

CHF

EUR

GBP

JPY

NZD

(vs USD)

-0.78%

-0.38%

0.00%

-0.14%

-0.48%

+0.87%

-1.40%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.02% (-0.82% prior 5-days)

ASIA/EUROPE FOREX NEWS WRAP

The past several days we’ve been focusing on the shifting US yield curve as a way to prognosticate market sentiment regarding incoming economic data and events. Having established that investors were buying US Treasuries especially in the “belly” of the curve – 3- to 7-year notes – yesterday’s significantly disappointing September US NFP report all but confirms that the Federal Reserve won’t taper QE3 next week.

While the prolonged period of excessive Fed monetary easing might prove positive for higher yielding currencies and risk-correlated assets over the coming months, there has been absolutely zero follow through today. While the USDJPY’s weakness following the US labor report isn’t surprising, the US Dollar’s resiliency elsewhere is purely a function of widespread risk aversion in FX markets.

The input fact that changed overnight leading to the severe sharp decline in the Australian and (especially) New Zealand Dollars was a spike in short-term Chinese money rates. The 7-day repo contract, already seeing higher rates over the past two weeks, spiked higher by more than 100-bps today.

It is worth mentioning that the Chinese credit crunch isn’t necessarily organic; that is, the PBOC has intentionally kept its lending standards tight despite slowed growth prospects. Part of the reason is to keep inflation in check, which has proven difficult amid a wave of foreign capital coming into the country to take advantage of the strengthening Chinese Yuan. Regardless; the Yen has stepped in to fill the role of safe haven du jour.

NZDJPY 5-minute Chart: October 23, 2013 Intraday

JPY_Reverses_Hard_against_AUD_NZD_as_Chinese_Liquidty_Concerns_Arise_body_x0000_i1027.png, JPY Reverses Hard against AUD, NZD as Chinese Liquidity Concerns Arise

Will the JPY crosses keep selling off on these Chinese headlines? History might suggest otherwise. The last bout of tight Chinese credit was met with intervention after several tense days in June 2013. Quantitatively, this type of risk aversion in FX is too intense for continuation; in 2013, the four occurrences that saw the NZDJPY depreciate by more than 2% in a 24-hour period had an average 5-day return of +1.85%.

Read more: US Dollar Drops as September NFPs Miss – EUR/USD Hits Fresh 2013 High

ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION

JPY_Reverses_Hard_against_AUD_NZD_as_Chinese_Liquidty_Concerns_Arise_body_Picture_1.png, JPY Reverses Hard against AUD, NZD as Chinese Liquidity Concerns Arise

See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators. Want the forecasts to appear right on your charts? Download the DailyFX News App.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES