FXStreet (Mumbai) – A renewed pick-up in buying interest seen in the Japanese yen on BOJ Kuroda’s speech, triggered a fresh sell-off in the US dollar across the board, dragging USD/JPY to 123.50 lowest. The Kiwi also recovered losses on falling USD, bouncing-off 0.71 barrier. While AUD/USD remains pressured below 0.7700 following RBA Steven’s dovish comments.
Key headlines in Asia
Australia’s consumer sentiment deteriorates in June, drops to lowest since Jan
Japan: PPI rises 0.3% in May, down -2.1% YoY
RBA Stevens: Open to ‘possibility of further policy easing’
BOJ Kuroda expects to meet price target around H1 FY2016 – Reuters
Dominating themes in Asia – centered on JPY, AUD, NZD
Quite an eventful Asian session, with Central bankers’ speeches emerging the main market movers. Earlier this session RBA Stevens delivered speech at the Economic Society of Australia, where he talked down AUD while stating that the central bank is open to more easing if it is necessary for economic growth. While the Kiwi swung back higher as the US dollar continued to lose ground on the back of aggressive yen buying.
Later in the session, BOJ Kuroda’s speech at the parliament spurred volatility dragging USD/JPY more than 100 pips lower, with the major now poised to test 123 barrier. BoJ Kuroda stated that Yen’s excessive rises have been corrected in past 3 years, also adding that real effective exchange rate shows that yen is weak, while also saying that yen may not weaken much further on real effective exchange rate basis. Kuroda further added that there are many other factors that influence dollar-yen pair, “I therefore don’t think we can assume that the dollar will strengthen more and more against the yen from here.”
Heading into Europe – centered on EUR, GBP
There is nothing much to report in the session ahead, with the main focus likely to be the industrial production and manufacturing production data from the UK.
UK industrial production results in April are seen as gaining 0.1% on a monthly basis after the 0.5% gain reported in March, and adding 0.6% on an annual basis compared to the 0.7% growth reported in March. While Greece headline may continue flowing in all through the day.
Financial markets are now waiting for the next major US economic release on Thursday – retail sales for May, which will help shape up further USD moves.
EUR/USD Outlook
Chris Capre, Founder at 2ndSkies believes a test of 1.1445 is likely this week, “After selling off impulsively late last week, the Euro has rebounded strongly over the last few days and continues to build a series of higher lows over the medium term. Notice how there was no follow through selling after the large red bar from Friday.”
(Market News Provided by FXstreet)