Markets were calm today in Asia as the Dollar remained steady and the Yen slipped and traders added slightly to their risk positions. The day began quietly as all eyes focused on the volatile Shanghai Composite Index which has been a propellant of currencies as of late due to its enormous moves and link to China which many consider to be a barometer of the global economy. The Shanghai Composite has lost just short of 20% since its yearly high on August 4th, falling just short of being called a bear market. A 6% drop earlier this week sent traders scurrying to risk adverse assets in the Dollar and Yen, and sent a chain reaction that rippled through Wall Street. Today, as Chinese shares drifted higher by almost 2%, traders found the confidence to buy into the wave of higher risk appetite.

The Yen crosses all pushed higher as equities rose, the EUR/JPY driving higher by about 60 pips, but unable to get through 134.40. GBP/JPY enjoyed a move of similar stature, gaining about 60 pips to highs just shy of 156.30. Against the Yen, the Aussie and the Kiwi dollars both enjoyed gains in the 40 pip ballpark as well. The Aussie and Kiwi also made modest gains of about 20 or so pips against the Dollar, following the stronger equities in China as well as surging Oil prices following a decline in US crude inventories. The AUD/USD was still taking up residence over the 0.8300 big figure late in the day.

Not much happened in the EUR/USD which traveled sideways in a 50 pip range centered around the 1.4230 level. The same could be said for the British Pound, which as well, was stuck in a range of about 40 pips with 1.6530 as the midsection. Expect the potential of these pairs to break out of these ranges should the UK Retail Sales data later today fall out of line with expectations.