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| EUR/USD Forex Market Rhythm |
Long remains as consolidation takes hold
EU maintained the tight ranges prevalent in European trading as EZ CPI turned into a non-event.
The pair held to roughly 1.3595-1.3620 ranges.
Corporate bids held the bottom while hedge funds were touted being on top with offers lined up to 1.3650. Aiding to cap was news that EU & IMF inspectors have called off an Athens visit scheduled next week as Greece has failed to meet commitments.
The sellers won out in the end though after numerous attempts to rally the pair failed & a late-session swoon in U.S. equity mkts put a hurt on risk assets. EUR/JPY slid from 139.45 towards 139.15. EUR/USD cracked the overnight low & tested near support 1.3580 before bouncing back above 1.3590 into the end of the day.
The market now awaits the ECB meeting next week to see if any new easing measures are introduced as inflation remains below target.
GU Moved higher on Mixed Economic Data
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| GBP/USD Forex Market Rhythm |
The pound moving in 1.6315/1.6360 range for most of the European session. UK home prices came in as forecast keeping the pound bid early.
The release of, below forecast, UK mortgage approvals & consumer credit moving the pound to lows near 1.6315.
The dollar began to weaken as EZ inflation & employment data came in near forecast. With the US still in holiday mode, & with no US specific data, cable moved higher near the fix to 1.6385 just above the Jan 2 high.
Weaker YEN and the Geopolitics of East Asia
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| USD/JPY Forex Market Rhythm |
Geopolitical concerns were likely to trump any populist economic protestations from the US Congress when it came to the weakening yen.
In return for helping serve as a check on Chinese military expansion, the US would turn a blind eye to seeing what's really at the heart of Abenomics: reflation mainly predicated on currency debasement.
And so with USD/JPY above 100 and talk of even more BOJ easing in the pipeline, there's nary a peep from Washington. A coincidence?
The Japanese appear to be taking the lead in countering Chinese claims on airspace in the East China Sea with military flyovers. In a strange way, this could allow for a further weakening of the yen without fear of political reprisal in DC. (Reuters)
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