Currency Analyst since 2010

May 29: Asian session


USD/JPY declined to 101.64. Yen strengthened as the greenback’s appeal diminished after Treasury 10-year yields fell to a 9-month low relative to similar-maturity Japanese government debt.

AUD/USD strengthened by almost 70 pips to $0.9290. The pair initially dipped on the release of worse-than-expected Australia private capital expenditure report (-4.2% q/q vs. expected -1.6%). However, the Aussie found support at $0.9210 and pushed higher as the estimates for spending in 2014/15 all came above expectations, supporting the view that RBA will keep rates on hold in the nearest future.

NZD/USD consolidates around $0.8485 following the yesterday’s 100-pips drop to $0.8470. Kiwi fell to the lowest level in more than two months as market sentiment worsened following a drop in business confidence and a weaker forecast payout to dairy farmers from Fonterra Cooperative Group.

Gold consolidates around the yesterday’s low of $1256 – this was the lowest level since early February.

EUR/USD is trading just above $1.3600 after dipping to $1.3590. Euro was set for its biggest monthly drop since February 2013 before data tomorrow on German retail sales and Spanish inflation that may back the case for additional stimulus from the ECB. There are bank holidays in Germany, France and Switzerland today. GBP/USD rose by 20 pips from support at $1.6708.

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