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FX Headwinds Led By JPY Selling

ByTalking Forex
Published 01/29/2016, 10:58 AM
Updated 07/09/2023, 06:31 AM

Plenty of headwinds in the FX markets today, though overwhelmingly led by JPY selling in the wake of the BoJ surprise move; cutting the deposit rate to -0.10%. USD/JPY was ramped up from the mid 118.00s to highs around 121.40-45, but London came in to more tempered levels in the mid-up 120.00s. Choppy stocks/oil deterred a retest initially, but after Q4 US GDP avoided any major disappointment, this along with strong personal consumption led us higher still, tripping stops through 121.55. Cross/JPY gains were notable across the board, but CAD/JPY stood out. Oil prices tried to recover amid to-fro comments from producers, so the CAD rate had a choppy session either side of 1.4000. EUR gains against the CHF set new highs at 1.1165, USD/CHF posting higher just shy of 1.0250, but after further struggling in the mid 1.0900s, EUR/USD turned tail – amid a broader USD turn - and retraced through 1.0850, setting up a fresh battle ahead of 1.0800. GBP also took a fresh hit, failing to hold onto the 1.4400 handle, falling below 1.4300 to breach stops through 1.4225-30 later in the day. In the EM, the CNH/CNY spread widened out 400bp+ levels a few times, but were quickly ‘contained’ not long after. ZAR through 16.00 vs the USD, and MXN in to sub 18.14 lows vs near 18.80 highs seen last week. RUB took out 75.00. Key event next week is US non-farm payrolls at the end of the week, but in the UK, super Thursday offers up the BoE decision/minutes/QIR. Globally, manufacturing PMIs are a notable data theme also.

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