Risk on but where is FX?

<p>Asian equities markets trade firmly in positive territory following another record high achieved in the S&P 500 yesterday with the index adding an additional 0.6% […]</p>

Asian equities markets trade firmly in positive territory following another record high achieved in the S&P 500 yesterday with the index adding an additional 0.6% on the day.

Asian bourses received further positive sentiment following media speculation that the PBoC will deliver further easing initiatives to stabilise the ailing growth picture in China. The measure rumoured to be on the agenda is the usual suspect of a cut in the reserve requirement ratio.

FX has failed to break from small ranges this week despite the buoyance seen in risk. The Asian session was dominated by the CNH, which made a fresh 18-month high. (CNH is soon be offered across all CI/IFX and FX Solutions brands.)

The NZD came under renewed pressure as the dairy board Fonterra announced a lower milk dividend to its farmers for next season as New Zealand business confidence dropped to 53.5 from 64.8.

European sentiment surveys will dominate data proceedings today with US mortgage applications the only distraction from across the board.

I feel the FX markets will continue to focus on what action the ECB will take next week, which looks to be the ‘package’ approach. This may well consist of a cut in both deposit and finance rates while leaving total QE on the hold for the moment.

 

 

EUR/USD

Supports 1.3610-1.3565-1.3520 | Resistance 1.3645-1.3675-1.3700

 

 

USD/JPY

Supports 101.50-101.20-100.75 | Resistance 102.00-102.15-102.35

 

 



GBP/USD

Supports 1.6730-1.6680-1.6655 | Resistance 1.6800-1.6840-1.6880

 

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