Forex news for Asia-Pacific trading and the weekend:
- Abe says bold new economic measures coming in autumn
- ANZ job advertisements +2.4% M/M
- China's Xi says will redouble efforts on supply side reforms
- Australia Melbourne Institute May inflation -0.2% vs +0.1% m/m prior
- Bookies raising odds of a Brexit
- Forex brokers cutting leverage ahead of Brexit vote
- BOC's Poloz: Mon pol targets can create long-term headaches
- SNB's Zurbruegg: It's possible to cut deposit rate further
- ECB's Villeroy: Brexit would likely trigger turmoil, central banks would have to act
- Fed's Mester: Weak employment number hasn't fundamentally changed my view
Markets
- Gold down $2 to $1241
- WTI crude oil up 44-cents to $49.06
- Nikkei -0.6% to 16541
- USD leads, GBP lags
The market is on edge about every Brexit poll. The vote is 17 days away but it's likely all that will matter in GBP trading until then.
Weekend numbers showed the 'leave' side about 3 points ahead and the pound tumbled 40 pips at the open. More signs of the trend towards leaving the EU led to another 120 pip drop down to 1.4353, where bids ahead of 1.4350 finally halted the decline and inspired a small bounce to 1.4409 but as European trading gets closer, it's slipped to 1.4383.
The US dollar has been generally bid after a sluggish start. USD/JPY is up a half-cent to 107.03 after tumbling more than 200 pips on Friday. It's a long road back but early signs are that the market isn't prepared to push the dollar further down.
The euro struggled in the earliest trades but recovered and then slowly sank back in a tight range. I'd expect some EUR/USD selling on Brexit worries if the pound continues to fall.
AUD/USD is down 40 pips to 0.7326 on steady selling. Risk aversion was high in early trading and the Nikkei opened sharply lower but it's improved in the past 90 minutes and commodities are generally higher. That hasn't been reflected in AUD but that might be more a function of the dead-cat-bounce bid in the dollar.
New Zealand is on holiday today but the kiwi was relatively well behaved.
