You’d think it was a risk-off day…The dollar, JPY and CHF are all in demand today despite the US manufacturing session skirting a contraction.
Regarding the CHF, there seems to be a fresh realization that the SNB nor the Swiss government have much more ammunition which which to weaken the franc (the government admitted yesterday “we’ll just have to learn to live with it”).
Regarding the JPY,there is talk things are going so well with the Nikkei back above 9 grand they won’t have to open the monetary spigots further. And that consumption tax hike Noda’s offering should be a barn-burner toward reviving growth. Japan remains the leading country on earth where bad things for the economy means good things for the currency…
For the dollar, lower odds of quantitative ease are helping prompt an unwind of positions taken in anticipation of a fresh dose of QE as early as this month.