FX commentary

The EUR/USD opened Asia around 1.3070 and basically didn’t move from that level through the entire morning. The EUR/USD traded in a 1.3063/77 range with year-end EUR/USD demand underpinning while ongoing EZ sovereign debt concerns discouraged attempts higher. Traders reported extremely light interest in the EUR/USD today and the pairing couldn’t get any traction from brief gains in other risk currencies ahead of key Italian debt auctions.

The USD/JPY opened at 77.88 in Asia and could only manage a 77.77/77.91 range through the morning session - with little in the way of flows changing hands. The USD/JPY didn’t react to a batch of Japanese data even though some of the data - such as Retail Sales and Industrial Output came in well below expectations. There was a lot of talk about the fact that the US Treasury report didn’t name China as a currency manipulator, but did single out the latest MOF/BOJ intervention efforts as being difficult to justify given the lack of market volatility in the lead-up to the intervention efforts. Cable opened in Asia at 1.5672 and traded sideways in a 1.5660-1.5674 range, last at 1.5660 and remaining heavy along with other risk pairs.

The AUD/USD opened the Asian session at 1.0157 after a deadly quiet US session. The pairing drifted down to 1.0137 in early Asian trading when there was some local corporate selling for the hedge settlement fix, but the dip was greeted with decent buying interest. The AUD/USD then pushed up to 1.0171 when real money funds bought due to end of month/quarter/year portfolio rebalancing. The AUD/USD settled back at the opening level around 1.0157 when Asian stock market weakness discouraged fresh buying.