- Major currencies saw mid-session reversals on a lack of news reports
With virtually no economic data printed during the Asian session, forex players mostly traded the previous session’s developments…before taking them back by the end of the session.
Mid-session reversal for the major currencies – With virtually no economic data printed during the Asian session, forex traders focused on Trump-related headlines and their impact on the dollar’s future.
Remember that the Greenback has been taking hits since the Fed’s statement wasn’t as hawkish as market players had expected. The trend then gained momentum after the Republicans’ failure to repeal Obamacare cast doubts that the Donald could deliver his tax and infrastructure reform promises.
Fast forward to today after the White House hinted that the drama isn’t over just yet. With Trump hinting that he and his friends will work together with Democrats and Sean Spicer setting a goal post for the tax reform, the dollar caught a breather during the U.S. session.
Asian session traders tried to catch on with the plot twist, but overall uncertainty and a bit of repatriation (for the Japanese markets) won out anyway and sent the major currencies back to their Asian session open levels.
Nikkei is up by 1.06%, Hang Seng is up by 0.55%, Australia’s A SX 200 is up by 1.17%, while the Shanghai index slipped by 0.29%.
Oil prices also attracted market bulls with Brent crude oil jumping by 0.51% to $51.17 and the U.S. oil prices rising by 0.63% to $48.03.
USD – The Greenback started the session on a strong note after the White House hinted that they will still pursue changes in the Obamacare. The rally petered out, however, as overall risk aversion won out and traders take profits ahead of bigger catalysts due later this week.
USD/JPY went up to 110.83 before sliding back down to 110.59 while EUR/USD dipped to 1.0858 before rising back up to 1.0863. Ditto for GBP/USD, which hit a low of 1.2553 before climbing back to 1.2566.
JPY – Relief for USD/JPY pushed other yen crosses up at the start of the session, but risk aversion and repatriation soon pushed the low-yielding currency back up against its major counterparts.
AUD/USD reached 84.56 before falling back down to 84.26, EUR/JPY fell from a session high of 120.39 to trade at 120.13, and GBP/JPY slipped from 139.22 to 138.98 by the end of the trading session.
- No major reports scheduled, but watch out for overall risk sentiment as well as positioning ahead of Theresa May officially triggering Article 50 tomorrow!
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