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US Q2 GDP REVISED down to 1.6% (vs. exp 1.4%) from advanced 2.4% reading, triggering a relief rally in equities and BROAD YEN SELLOFF, especially since the Japanese currency has been already hit by: i) fresh political fallout in Japan and ; ii) escalating signals of a looming stimulus package...

JOBLESS CLAIMS GOOD ENOUGH FOR FURTEHR USD WEAKNESS, +473K, which is good enough for risk appetite to improve, but since the overall continue to show clear uptrend, USD to remain on the backfoot. YEN WEAKNESS suggests 80.60s in CADJPY, NZDJPY eyes 60.20. GBPUSD rebound accumulated fresh bids in...

STERLING RALLIED immediately after the BoE minutes showed Andrew Sentence continued to call for a 25-bp rate hike. While this was no real surprise, some players thought that perhaps Sentence would not dissent considering the emerging slowdown in inflation across the G7. Considering yesterdays...

US JUL INDUS PRODUCTION +1.0%, twice more than expected, with capacity utilization rising at its strongest pace since Sep 2008 at 74.8. YEN CROSSES seen making the best of the day as Japanese intervention is in focus. NZDJPY eyes 61.20, CADJPY seen at 83.20. AUD builds on gains after a neutral...

BEST OF BOTH WORLDS FOR KIWI SHORTS US equities sell-off as jobless claims rise +479K, highest since April, adding to NZD losses against USD and JPY. Being a high yielding FX currency, NZD is among the usual victims of risk aversion, especially after higher than expected rise in NZ unemployment....

KIWI SLUMPS across the board after NZ unemployment rate jumped to 6.8% in July from exp 6.4% (vs exp 6.6%). My followers on twitter were alerted 75 mins before the release of the report with the following tweet: $AUDNZD longs worth a look ahead of tonight's Kiwi job figures. Cross already broke...

USD DROPS ACROSS THE BOARD on a combination of cautious remarks from Moodys about the US credit rating and persistent improvement in the Eurozone consumer sentiment. Although Asian equities finished around neutral territory, markets are decidedly USD-negative. AUD stabilized at 0.89 before...

Watch the risk of contacgion into Eurozone core nations, as well as the USD Index monthly rise and the broadening gains in the Swiss franc. ...

NZD IS DAYs HIGHEST PERFOMER after the RBNZs 25-bp rate hike, which lifted NZDJPY and NZDUSD to 62.20 and 0.6816 respectively. AUD, NOK and CHF follow behind as strong performers. IT WAS RARE to see Asian stocks rally despite late session turnaround in US indices. Robust jobs figures in Australia...

RBNZ RATE HIKE? Markets price a 81% chance of a 25-bt rate hike by the RBNZ to 2.75% (21:00 GMT today) A spike in inflation expectations to an annual 2.9% in Q2 from 2.1% and unemployment dropped to 6.0% from above 7.1%, could prompt a rate hike alongside a hawkish policy statement. NZDUSD eyes...

STERLING IS DAYs HIGHEST PERFORMER today, followed by CLOSELY by NZD and CAD out of a group of 11 currencies. The Kiwi (NZD) and Aussie both rallied on a CHINESE DATA LEAK that China exports soared 50%, well above expectations of 32%. The report was scheduled to for release later in the week....

ANOTHER JAPANESE PM BITES THE DUST, this time PM Hatoyama steps down over the destabilization of his tripartite coalition govt resulting from his failure to move the US military base out of Okinawa. Both JPY and USD had recovered in afternoon NY trading as US stocks ended in the red. Markets turn...

MARKETS LOOKING TO STABILIZE as major indices succeed in holding above the May 6 lows. Dow-30 fell in 9 out of the last 10 days, while S&P500 fell in 8 out of the last 10 days. Todays US preliminary Q1 GDP figures could help FX traders opt for risk-seeking traders (selling USD and JPY), such as...

GOLD THE NEW ANTI EURO: Gold price action is increasingly tied to the euros broad performance and less so to the USD. Since March, the yellow metal has proven to be among the few safehavens away from the Eurozone sovereign woes to the extent that the correlation between GOLD/USD and EURUSD has...

DAMAGED GOODS is the state of the commodity currencies as their selloff intensifies primarily against JPY, USD and to lesser extent the euro. What started as a shapr selloff in AUD is now broadening into CAD and NZD. We continue to target 0.8140 and 0.80 as prelim AUDUSD targets, followed by 0.78...

USD 3-MONTH LIBOR REACHES 0.48%, doubling the levels from the November lows, as it reflects the escalating cost of USD-funding for US and non-US banks. Lack of trust among banks as well as liquidity difficulties are the main culprit. Fed has responded by providing USD-funding through FX swaps with...

ECB Intervention is inevitable, Gold set to catch down with other commodities & Aussie to way down under...

FEAR OF ECB INTERVENTION PULLING FX traders away from selling EUR and GBP, and forcing them to knock down commodity currencies (AUD, CAD & NZD). The massive 200-pip jump in EURCHF in less than 10 minutes (13:00-13:10 BST) followed by an additional 100-pip move is the work of no other than the...

GBP RECOVERS ON DAVID CAMERONs offer to the LDP to form a coalition and build a majority government. If a deal goes through between these two diametrically opposed parties (Conservatives with Liberals), we expect the pound to garner further gains towards $1.53s even though passing policies would...

GOLD HITS NEW RECORD vs. JPY at 112,670 yen, breaking the old December high as the yellow metal SHRUGS FALLING COMMODITIES due to ongoing sovereign uncertainty. The last time GOLD touched a new record in YEN TERMS was in 1st week of December when it was followed by pullback later that week on...

GBP is the day's weakest currency and JPY is the strongest out of a group of top traded 12 currencies. GBPUSD hits fresh session lows despite the strongest UK construction PMI in over 2 years. PM Gordon Brown is expected to formally call the election on May 6. Mixed opinion polls are said to be...

Today's March ADP rport (12:30 GMT) is an appetiser for what could be the first net creation of US jobs since December 2007, expected to show arise of 40K in March from -20K in February. Signs of improved US labour markets were seen in yesterday's consumer confidence, whose perceptions index (jobs...

FX TECHNICAL TRENDING. While we always advocated the importance of paying attention to fundamentals on this website, the past 2 weeks have been dominated by technical trending in FX markets, whereby the US dollar began accumulating strength against EUR, GBP and to a lesser extend commodity...

MORE AUSSIE LOSSES seen ahead as AUDUSD is unable to break above its 17-month trend line resistance of 0.9280. The pair sets up for further selling towards 0.8990 (from current 0.9090), followed by 0.8870 next week on a combination of escalating USD strength and AUD weakness potentially occurring...

NZD weakness extends in European trading after the RBNZ decision to hold rates unchanged was accompanied by a dovish statement (no rate hike until before summer). NZDUSD hovers around 0.70, capped at 0.7050, with prelim downside target at 0.6930. NZDJPY consolidates at 63.30s territory, but 64.70...

CHINESE GOLD REMARKS overnight helped drag the metal lower when the head of State Administration of Foreign Exchange said China faced constraints in adding gold holdings, considering it already holds 3000 tons. SAFE said the long term yield of holding was not good, dampening speculation that...

Its all about yen weakness in Asian trade as the combination of improved risk appetite after better than exp US jobs report and public statements from Japanese officials (adding to QE and allocating budget for FX intervention). CADJPY and NZDJPY among the best performing pairs, eyeing prelim...

USD EXTENDS GAINS across the board, dragging EUR to 1.3580 and cable back towards the 1.5030 lows. AUDNZD continues to rally beyond 1.31 but AUDUSD deepens losses towards 0.8990s, eyeing 0.8950s. Worse than expected pending home sales weighing on risk appetite. Gold hits 1127 target in previous...

US Feb services ISM hits 53 (exp 51) highest since Dec 2007, while Employment component rises to 48.6 (highest since April 2008) from 44.6. The report pushes 10-year yields to 3.65%, while EURUSD remains capped at the $1.3670 resistance mentioned in previous IMT (61.8% retracement of the...

RBA PREVIEW (we also got AUD Retail Sales at 00:30 GMT): Hardly anyone is speaking about tonights RBA interest decision (03:30 GMT) because most economists expect a 25-bp hike to 4.00%. Although we expect the RBA to make its 4th rate hike of the current tightening cycle, we deem this probability...