JPY repatriation as stocks take another dive; NOK and GBP also on the back foot
The big move today was in USD/JPY, after soft China manufacturing PMIs added to the gloom reflected in western stocks ahead of the new year sent Asian equity markets into a(nother) spin. Chinese stock markets were eventually halted (5% and 7% circuit breakers), and this prompted a flight to safety, or more a case of repatriation, with the JPY dropping through 120.00 and later 119.00 but bottoming out at 118.70 – 118.00 the next key level from here. Adding to negative sentiment was news that Saudi Arabia was to cut all ties with Iran, but this lifted oil prices. Not that this materially affected the CAD and NOK, with the latter getting hit on tech-based flow ahead of the New year, but NOK/SEK extended to fresh 23 year lows below .9500. EUR/NOK pushed up to 9.6870, but comfortably short of the 9.8790 highs seen a little over a year ago. GBP is also a notable underperformer at present, as Brexit fears continue to pressure all round. Cable dipped below 1.4700 before a mini revival, but the 2015 lows in the mid 1.4500’s are clearly in the line of fire. Heavy losses in both AUD and NZD were also extended in the Euro and North American sessions, but later price action was far from panic as EUR/USD losses were the key factor here. Latter resistance in the mid 1.0900s led to a fresh push for 1.0800 again, but only sub 1.0800 will make traders sit up and take notice here.