Risk was certainly back on today in the Asian currency markets as elation from strong earnings from Intel and dramatic moves from Singapore’s central bank pushed more people into higher yielding positions. The earnings season on Wall Street began auspiciously with strong earnings from Intel, helping push equities as well as risk appetite higher today in Asia. The second phase of the flight to risk was a move by the Monetary Authority of Singapore where they tightened monetary policy with a revaluating of the Singapore Dollar by a “re-centering” of the band at current market rates, which in effect are at the high end of the old band. The dramatic move in monetary policy by the MAS made many investors focus once again on the Chinese Yuan and question when that currency would be revalued if at all. The MAS followed the move with comments lauding the country’s strong emergence from its worst recession in recent memory.
The dollar and yen were both losers as risk climbed today in Asia. EUR/USD posted handsome 60 pip gains to 1.3665 highs as the EUR/JPY grew from 126.75 to just over 127.40 on a day that did not have Greek plight as a top headline. Yen crosses moved closer to weekly highs as the safe have yen was assertively sold. USD/JPY was range bound between 93.35 and 93.15 based on the weakness of both the dollar and yen.
The day began poorly for the New Zealand currency as retail sales came in very weak at -0.6% as opposed to the expected +0.2%. The NZD/USD dumped almost 50 pips to touch 0.7085 on lows. AUD/NZD jumped from 1.3010 to eventual highs over the 1.3090 mark. AUD/USD was firm as well, marching to 0.9320 highs to post a 50 pip advancement. The pair looked well entrenched above the psychological 0.9300 level heading into a London Session that was devoid of any data releases.