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Asian Session – Yen gains on safe haven appeal; aussie drops on copper

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The yen managed to gain during today’s Asian session, as volatility in risk assets made traders seek safe havens such as the Japanese currency.  Dollar / yen dropped to a near 1-month low of 116.73 before bouncing back to 117.15.  Stocks were volatile on Wall Street, as the benchmark S&P 500 traded as high as 2057 in early trading but plunged as many as 50 points to reach a low of 2007 in late session.

Euro / yen fell to its lowest in 2 ½ months at 137.62 as the yen was strong across the board.  Interestingly, gold was unable to capitalize on risk aversion, as it remained mired around 1230 dollars an ounce.  Gold has struggled to climb above the 1240 level, which could then lead to an assault of the 200-day moving average at 1254.

Euro / dollar was trading in the 1.1750-1.18 area, as it awaited data on Eurozone industrial production as a well as a non-binding verdict by the European Court of Justice on a previous bond-buying program by the European Central Bank.

The Australian dollar came under intense pressure after one of the country’s key exports, copper, saw its price crash by 6.2% after forecasts for slower global economic growth by the World Bank.  The aussie dropped to a low of 0.8067 against the dollar from around 0.8180 at the New York close and subsequently rebounded a little to 0.8090.  Tomorrow’s employment report for Australia will also be important for the currency.

Looking ahead, Eurozone industrial production for November will be key to watch, followed later by the highlight of the day; US advance retail sales for December, which are expected to dip slightly by 0.1% month-on-month after a particularly strong November (+0.7%).  The Fed’s Beige Book of regional economic conditions will also attract attention.  The Bank of England Governor Mark Carney will also speak before a parliamentary committee in the late European session and sterling could react to his comments.


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