Risk appetite remained in play today in Asia with investors looking to get into higher yielding assets as the state of the global recovery looked a bit more optimistic. Better than expected unemployment claims in the US helped to boost stocks and fade memories of poor data results in manufacturing and housing last week. Equity buying carried over into Asia with Japan’s Nikkei 225 posting its best week in seven months with a weekly gain of almost 4%. Currencies could not ignore this as the EUR/USD remained firmly entrenched just under the 1.2700 big figure for the better part of the day, setting it up for potential profit taking ahead of the weekend at these two month highs. Earlier upbeat commentary from the ECB president Trichet as well as a lack of any damning news helped to keep the European currency lofted.
Yen crosses were well supported with the recent cheerful mood in the markets although gains were slight. The EUR/JPY topped 112.50, GBP/JPY 134.50, and the CAD/JPY drifted over the 85.00 big figure amidst a backdrop of regional stock prices that were all in the green. USD/JPY again a puppet to the crosses breached an 88.65 high in a tight ranged 35 pip day.
Elsewhere, the Australian dollar continued to bang its head against resistance at 0.8780 against the dollar but failed to break through, while the kiwi dollar extended gains to 0.7110 against the greenback and to 1.2325 against the Aussie. GBP/USD lacked any conviction between 1.5130 and 1.5170 although GBP/CHF saw bids to 1.5950 highs.
Crude oil remained at elevated levels with BCO/USD centered near the $75.00 per barrel level due to the perceived potential for global growth. XAU/USD continued to trade under the $1200.00 psychological big figure in Asia, at bargain prices that should attract buyers with the first scent of pessimistic news or data. Enjoy the weekend…