Overall, the currency market traded on a light volume in the Asian session, nothing comparable with the momentum seen one session ahead. Until now, the dollar gained some ground during the Asian trading hours, but the moves are very small compared with the greenback’s decline in the last day of trading. Most likely, the majors will continue to trade with light volume until the London open, when traders will decide if the market will need to retrace or extend the dollar’s decline.
The Euro (Eur/Usd) posted the strongest gains since 2000, as the pair rose 200 pips. As well, the pair touched the highest value since January, as the dollar plunged against every other currency during the FOMC release. Just before the release, the euro had already gained 100 pips, but the report added another 350 pips in just a few minutes of trading.
The Pound (Gbp/Usd) saw a very volatile trading session yesterday. The pair was sold 200 pips lower during the European session, as a report showed the very poor state of the U.K. labor market. From there, the pound started to slowly recover, and during the FOMC report, the pair jumped 300 pips. Now, the pound is trading just under the 50-day moving average, the resistance area of the last few weeks.
The Aussie (Aud/Usd) traded in a 40-pip range during the overnight session and in the early part of the U.S. session, but jumped nearly 200 pips after the Fed’s statement. Moreover, the pair reached the 1.68 area during the late U.S. session, where it also topped at the beginning of February. During the Asian session, the aussie fell 45 pips.
The Cad (Usd/Cad) dropped to three weeks low, and the dollar plunged against any other currency yesterday. During the intra-day session, the cad broke under both the 20 and 50-day moving averages, as it fell a little more than 200 pips. Yesterday, was the fifth consecutive day in which the cad declined.
The Swissy (Usd/Chf) fell nearly 400 pips in the last day of trading, and broke under the 20, 50 and 100-day moving averages. Additionally, the swissy is now trading under the value touched last Tuesday, when the SNB threatened to intervene in the currency market. During the Asian session, the swissy rose 25 pips.
The Yen (Usd/Yen) dropped 250 pips yesterday, falling to the lowest value touched in the last few days. Even before the U.S. session, the yen founded some sellers that drove the pair some 90 pips lower. During tonight’s Asian session, the yen rose 25 pips.
The Japanese all industry activity index came in at negative 1.7 percent for the month when compared to the previous month. The index fell less than the expected 2.0 percent economists had expected. The decrease was led by a drop in the industrial production index by 11.3 percent while the services sector increased 0.4 percent.