Intraday Market Thoughts

Yen Weakness Returns, Chinese Trade Data Upcoming

by Ashraf Laidi
Jan 10, 2013 0:17

Yen sellers returned with a vengeance as USD/CAD surged through 88.00. The aussie and kiwi were the best performers on the day. Chinese trade balance and Australian building approvals are Asia-Pacific highlights. We replaced both of last night's new USDJPY Premium longs as those were unfilled (missed by 10 and 30 pips respectively before the pair hit the projected targets of 88.70).  Access to these Premium trades is below. 

USD/JPY stormed more than a cent higher from 86.60 at the open on Wednesday. The trigger for the final portion of the rally was news of a meeting of Japan's Council on Economic and Fiscal Policy, which hasn't met in at least three years.

Headlines from the meeting were neutral and BOJ Gov Shirakawa said it was merely to exchange views but the market took it as a sign that new, dovish policies are coming.

The pound and euro were slightly weaker in New York trading but both resumed making gains against the yen. The Australian dollar wiped out the previous two days of losses and is threatening to make a multi-year high. The prices of AUD-driver iron ore continue to gain despite broad skepticism. The commodity has gained nearly 60% since the beginning of December.

The next factor for AUD is the release of Chinese trade data at 0200 GMT. Exports are forecast to rise 5% year over year and imports climb 3.5%. These numbers have been volatile in the past several months so a wide miss can't be ruled out.

The other release of the session is at 0030 GMT when Australian building approvals are expected to rise 5.0% after a 7.6% decline previously. The data could help break AUD/USD out of the recent 1.0470-1.0530 range.

Act Exp Prev GMT
Trade Balance - BOP Basis (NOV)
¥-450.3B Jan 10 23:50
Trade Balance (NOV) (m/m)
$-700M $-620M $-718M Jan 09 21:45
Trade Balance (NOV) (y/y)
$-1.46B $-1.34B $-1.37B Jan 09 21:45
Building Approvals (NOV) (m/m)
2.9% 5.0% -5.1% Jan 10 0:30
Building Approvals (NOV) (y/y)
13.2% 14.5% Jan 10 0:30
Exports (NOV)
$3.81B $3.56B $3.46B Jan 09 21:45
Imports (NOV)
$4.51B $4.20B $4.18B Jan 09 21:45

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