Intraday Market Thoughts

Euro Soars, Yen Sinks

by Ashraf Laidi
Jan 11, 2013 0:21

US trading on Thursday feature major moves in most currency pairs after Draghi said the ECB decision to hold rates was unanimous. The euro was the best performer and the yen the laggard. Chinese CPI and Japanese trade balance are the top upcoming releases. All 4 EURUSD and GBPUSD Premium trades have hit al targets. Other insights remain in progress.

Market participants looking for action found it on Thursday. The euro climbed more than 200 pips on a number of crosses after Draghi swamped euro shorts by saying that there was no serious discussion about cutting rates at the monthly ECB meeting.

The euro busted through 1.3150 to as high as 1.3175. EUR/JPY also climbed to an 18 month high.

The pound was dragged along with the euro strength while the USD dollar fell broadly except for the yen. The Japanese government continues to hammer away at the yen with Nikkei reporting the BOJ will specify a 2% target, may target employment and that the government will unveil a huge stimulus package aiming to create 600,000 jobs.

Late in the session, USD/JPY broke above 89.00 for the first time since June 2010.

Upbeat risk sentiment added to gains for risk trade as the S&P 500 closed at a five-year high. US economic data was light with jobless claims at 371K compared to 365K as the only notable release. The Fed's Bullard also added to upbeat sentiment by forecasting 3.2% US growth this year.

Asia-Pacific traders will have a great deal to digest with all the price swings while they were sleeping. In addition,  the Japanese current account and trade balance will be released at 2350 GMT. The trade deficit is expected at 832B yen

The attention will then shift to Chinese CPI at 0130. It is expected up 2.3% y/y. The Fed's Kocherlakota may also deliver remarks during the session.

Act Exp Prev GMT
Consumer Prce Index (DEC) (m/m)
0.5% 0.1% Jan 11 1:30
Consumer Prce Index (DEC) (y/y)
2.3% 2.0% Jan 11 1:30
Trade Balance (NOV)
$-41.30B $-42.24B Jan 11 13:30
Trade Balance - BOP Basis (NOV)
¥-847.5B ¥-450.3B Jan 10 23:50
Philadelphia Fed's Plosser speech
Jan 11 14:30
Current Account n.s.a. (NOV)
¥-222.4B ¥-3.5B ¥376.9B Jan 10 23:50
Continuing Jobless Claims
3109K 3230K 3236K Jan 10 13:30
Initial Jobless Claims
371K 365K 367K Jan 10 13:30

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