General Commentary
Last week’s currency trading review
The USD/JPY was the currency in the spotlight last week as technical resistance was broken and daily highs saw the major sitting at Y79.50 by the weeks close. Analysts are pointing to the recent string of better than expected US data and the dampening call for more QE3. US Treasury Yields are creeping higher and widening the gap between US and Japanese funding costs. The Bank of Japan is expected to keeps low for an extended period of time and it is the comparison with the US FED monetary policy that creates most of the USD/JPY movement.
The AUD/USD was another currency in focus last week with substantial losses across the board as the AUD crosses led by EUR/AUD and GBP/AUD finally reversed direction. The AUD has been a favorite for many months and has built up very large long positions against nearly all currencies. Growing concerns about the slowdown in the Chinese economy added to the selling pressure and on Friday we saw the pair break month lows at 1.0430 to hit 1.0410 before a small recovery. Longer term bulls will likely step back and see if the underlying strength in the Aussie still remains.
Currency Movement last week
EUR/USD was up +0.33% closing at 1.2330, after opening the week at 1.2289.
USD/JPY was down +1.62% closing at 79.54, after opening at 78.25.
GBP/USD was up +0.03% closing at 1.5689 after opening at 1.5684.
AUD/USD was down -1.53% closing at 1.0416 after opening at 1.0575.
