Intraday Market Thoughts

Rare Love for Yen Longs

by Adam Button
Feb 15, 2013 0:10

Valentine's Day brought a dose of love for the yen as it retraced a portion of its recent losses. The euro was the worst performer on the day. The New Zealand dollar climbed above 85.00 in the early part of trading after an upbeat retail sales report. The latest trades ahead of this weekend's G20 meeting have been issued. New trades on gold will be added on Friday, while the existing silver and oil trades remain in progress until new trades are added on Friday. See today's Premium Insights below.

The US dollar was broadly stronger on Thursday after initial jobless claims fell to 341K compared to 360K expected. It was among the strongest readings since the crisis and shows that the US economy is headed in the right direction.

The Fed's Bullard forecast US growth near 3% this year and said he would taper QE operations if he could. He also suggested lowering the monthly QE tally by $15 billion for every 0.1% drop in unemployment.

On exception to the dollar strength was JPY, which was the best performer on the day. EUR/JPY is in danger of breaking last week's low of 123.43 and that could mark the start of a deeper retracement phase.

A draft copy of the G20 statement leaked on Thursday and although it didn't mention the yen specifically, it caused a quick 20 pip fall in USD/JPY. Yen traders have been exceptionally jittery in the past week to any yen-positive headlines.

In early Asia-Pacific trading, the kiwi continues to be the darling of the FX market after January retail sales climbed 2.1% compared to 1.4% expected. The upbeat number follows an extremely strong PMI a day earlier and propelled NZD/USD from a daily low to a daily high of 0.8515 in moments.

The rally marks a fresh high since mid-2011 and breaks through a tough area of resistance.

Other items on the calendar include revisions to Japanese December industrial production at 2330 GMT and the BOJ monthly report at 0000 GMT. Neither item is likely to move markets.

Act Exp Prev GMT
Industrial Production (DEC) (m/m) [F]
2.5% Feb 15 4:30
Industrial Production (DEC) (y/y) [F]
-7.8% Feb 15 4:30
Continuing Jobless Claims (FEB 2)
3114K 3205K 3244K Feb 14 13:30
Initial Jobless Claims (FEB 9)
341K 360K 368K Feb 14 13:30

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