Asian indices were broadly lower today with the exception of the ASX which posted modest gains on the back of strong Capex numbers (+6%) and a revision of the Q4 GDP figures from +0.2% to +0.5%. The central themes to currency price action today focuses on the continued heightened demand for the Greenback, the Yen's uncanny decline while the Aussie and the NZD defy gravity. News that the UK Government has established an asset protection scheme and the U.S Bank stress testing has been met with enthusiasm across the board.
While the EURUSD broke it's week long downward channel last Friday it seems the dollar has regained strength against the Euro as the focus shifts back to the Old continent for concerted action. Dollar demand remains strong and a break below 1.2700 would refocus the 1.2516 support (18 Feb low).
USDJPY trades higher as the Japanese economy weakens further. The pair tests 98.00 at the time of writing and seems set for 3 digits. This said, a substantial retracement shouldn't be overlooked. Bullish trend bringing the pair from 89.70 to 98.00 has run largely unabated since the 11th of Feb, if we test current level several times we could refocus 96.00.
Price movement in gold was positive at the early part of the trading session, experienced a reversal once it reached a high of $978oz. Much of this move was not due to ETF selling, but some technical pullbacks after stops were hit triggering further downside. The combination of marginally positive equity market performance, light ETF flows, led to a freefall in gold prices
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