Dollar Still On Back Foot But JPY Appreciates Post BoJ
Rakuten Sec Australia | Jan 23, 2018 10:07PM ET
We did see some decent range trading opportunities yesterday as we saw a bit more volatility across the currencies. The main risk event of the day was the BoJ meeting and although it disappointed in terms of the message from the bank, we did see some good moves from the currency. The message from Governor Kuroda was very much ‘steady as she goes,’ but with some market participants looking for an indication of more aggressive change, the silver lining was the one dissenter in the voting (8-1). This saw some good JPY buying across the board and it continued to appreciate for the rest of the day USD/JPY and indeed the rest of the majors.
In the London session, we had a slightly stronger than expected ZEW print which helped the euro off it’s lows near 1.2225 to head back up towards recent highs – it’s sitting around 1.2300 again as we open the Asian session. We saw the dollar finish the day on the back foot once again as the US increased tariffs on solar power and white goods – this is seen as further evidence of President Trump’s protectionist policies moving forward.
Looking ahead to today’s trading and we have little (again!) in the way of fundamental data releases due in the Asian session; however, things should get more interesting in the London session as we have the usual raft of Flash Manufacturing PMI numbers due out followed by the UK employment data. This will be a big focus for sterling traders as we sit at post Brexit highs going into today’s session and further good number out of the UK could see the currency accelerate into new topside ranges.
In the New York session we’re due to have the Existing Home Sales numbers released as well as the US Crude Oil Inventories numbers later in the day.
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