Daily FX wrap: USD/JPY finds a n/t base at 104.00. GBP brushes off a dovish Weale. CAD still pressured as oil still heading south.
Most of the major FX moves were seen through Asia today, with marginal extensions seen through early London. USD/JPY was a big mover, falling through the 105.00s and 104.00s on reports that the Japanese stimulus package was to be far less than expected. However, after printing a 104.00 low post Asia, the recovery – bolstered by healthy US consumer confidence – saw 104.75 traded.
US services PMI not as good as expected, but still above the key 50.0 pivot.
GBP again showed its resilience as dovish comments reported in the FT from BoE member Weale prompted fresh losses in cable. Dipping through 1.3100, we found support ahead of 1.3050. EUR/GBP found congestion around .8425 again, moving back into the .8300s as further evidence that an oversold pound is due a short squeeze.
Another day of losses in oil price, but USD/CAD resistance at 1.3250 is holding strong. North American trade is likely to test this level as short-term specs buy dips into 1.3180-1.3200, but the API later today could see some volatility in WTI. Front month crude hit a low of $42.40, but the bounce is proving short-lived.
NZD was clearly overstretched with the 1+ cent recovery into the high .7000s, but little else behind it. All the focus turns to the FOMC tomorrow, but Australian inflation and UK GDP ahead suggest anything but a quiet run up to the week’s main event.