Currency Analyst since 2010

June 20: Asian session

The greenback strengthened versus its counterparts as the Fed’s Chairman Ben Bernanke said the central bank could reduce its bond buying this year and end it in 2014 if the economy achieves sustainable growth. US housing and manufacturing data due today may add to the case for reduced monetary stimulus.

EUR/USD slid from yesterday’s high at $1.3415 to $1.3250. The leading euro zone’s nations will release flash June PMI figures today (some improvement is expected), Spain will conduct 10-year bond auction, while finance ministers of 17 euro area economies are to have a meeting. GBP/USD lost more than 150 pips yesterday, breached support at $1.5555 (200-day MA) and is now trading in the $1.5430 area. Watch British retail sales at 08:30 GMT.

USD/JPY edged higher in the Asian trade and tested the levels above 97.00 following the yesterday’s post-FOMC jump. According to Moody’s agency, Abenomics does not guarantee the revitalization of economy. In their view, Japan needs more incentives to boost business investment. USD/CHF recovered to the levels above 0.9300.

AUD/USD extended losses to $0.9240 after the yesterday’s 250 pips drop. Downbeat China’s HSBC June flash manufacturing PMI (48.3 vs. 49.1 expected - worst for 9 months) increased pressure on the Aussie. NZD/USD lost ground and dropped to $0.7820. Yesterday New Zealand published a worse-than-expected Q1 GDP (+0.3% q/q vs. +0.5% expected). USD/CAD rose almost reaching 1.0300.

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