Markets are generally steady ahead of New Year holidays. Broad based strength is also seen in the Japanese yen with EUR/JPY breaching 100 psychological level briefly while GBP/JPY tread water below 120. USD/JPY also dipped to as low as 77.29 so far but thin market consolidation helped stabilizing the rally in Yen. Exporter’s repatriation is cited as one of the reason for yen’s strength today. But it’s also believed that, after US’s criticism on yen intervention since August, there is no prospect of G7 coordinated intervention like that happened after the March disaster. The Japanese yen could extend rally as traders come back from holidays. Meanwhile, Euro would likely remain weak in near term. Funding from ECB’s three year LTRO has basically came back to the bank’s deposit. This week’s … Read entire article »

By: Sara Patterson In the year’s final day of trading the Australian and New Zealand Dollars rose against most of their major trading partners, recovering from one-week lows as Asian stocks rallied to increase demand for higher-yielding assets. The Australian Dollar, known fondly as the Aussie, rose 0.2 percent to $1.0155, up from $1.0044 at the close of yesterday’s US trading session. The currency also rose slightly against the Japanese Yen, from 78.69 to 78.71. The New Zealand Dollar posted similar gains, up 0.2 percent to 77.26 cents against the greenback. Despite these gains, the Australian Dollar is set to end 2011 lower 0.8 percent lower against the Dollar and 5.2 percent lower against the Yen. The New Zealand Dollar is also ending the year on a low note, down 1 percent … Read entire article »

Risk appetite was given a lift overnight on solid US data but was capped in Asian session following China manufacturing data. The preliminary reading of HSBC manufacturing PMI stayed in contraction region at 48.7 in December. Weakening external demand is starting to impact exports and the manufacturing sector. This was also reflected in exports which slowed in November for the third month. There are prospects of further easing measures from PBoC as markets are speculating a reserve ratio cut in early January. Focus will turn to the official PMI to be released this weekend. Dollar pared back some gains after yesterday’s Italian bond sales triggered rally. Dollar index is still hovering around 80.5 level as there is a lack of follow through buying above 80. Yen is seen mildly higher … Read entire article »