- The BoJ kept its target rate unchanged at 0-0.1% and downgraded the economic assessment
- WestPac Australia leading index falls 0.3% in September
- Australia Q3 wage price index +0.7% QoQ, (0.9% expected)
- PBOC thumbs it’s nose at US by fixing USD/CNY higher at 6.3501
- Regional stocks fall by 1.25% on average
- Gold and Oil fall by over 0.5%
- Rumours about further French downgrade prove to be spurious
Another risk off session in Asia with some heavy flows, particularly in the EUR/USD near 1.3475/80. USD/Asia was well bid after the higher USD/CNY fix and this sentiment carried over into the majors.
EUR/USD saw a low in NY near 1.3480, with barrier protection ahead of 1.3475 helping to form a short-term base. Early Asian markets traded around 1.3540 before risk aversion started to grow after stockmarkets headed south. There were also some spurious rumours re downgrades doing the rounds which no doubt added to the risk-off sentiment. Hedge fund bids and barrier protection at 1.3475/80 was wiped out by stop-loss selling and momentum funds adding to existing positions on the bearish break. Another barrier at 1.3450 was broken and the low was 1.3435, with more barriers reported at 1.3425 and 1.3400. The high since the low has been at 1.3465, so bounces are anaemic. Range: 1.3435/1.3540
AUD/USD also encountered some heavy selling as risk aversion grew. It fell by over 1% but failed to test reported bids at 1.0060. The general selling in all Asian currencies added to the bearish sentiment. Ranges: 1.0068/1.0181
USD/JPY didn’t react at all to the BoJ decision, trading a very tight 76.98/77.14 range.
Cable 1.5755/1.5827; USD/CHF .9145/.9207
