Dollar in demand
USD/JPY extended its rally past 116.00 to hit a high of 116.20 in Asian trading on Friday. This is a fresh 7-year high. EURJPY rallied with USDJPY from 144.39 to a fresh trend high of 144.84 before falling back to 114.31 and has since steadied. 145.08 on January 2 is the high of the year, 145.67 the spike high on December 27 ’13.
Next week’s Japanese risk events including Q3 GDP Monday and announcements on any delay to Japan’s sales tax hike and snap elections are key for the yen’s direction.
EUR/USD fell back after its rebound to 1.2492 late in New York trading, continuing lower from 1.2478 to 1.2451 in Asia before steadying. The pair will perhaps remain caped below 1.2500 into next week along with perceived risks into the weekend G20 Brisbane Summit. EURGBP topped out between 0.9635-52 EURCHF did little, treading water between 1.2019-23 and the market on the look-out for any SNB action to protect its 1.2000 floor.
GBP/USD pushed lower still in Asia, off from 1.5711 to 1.5666 and levels not seen since September of last year. The dovish BoE inflation report suggest more downside may be seen.
USD/CHF was bid alongside USD/JPY, up a leg from 0.9635 to 0.9661 but still well within its recent 0.9600-0.8700 range.
AUD/USD opened in Asia at 0.8723 and traded down a leg from 0.8724 to 0.8681. Under pressure from the start after failing at key resistance 0.8765 overnight, it fell through 0.8700 as the USD gained across the board. AUDUSD could see moves towards 0.8600 as the greenback strengthens.
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