Asian markets were subdued on Monday and most currencies pairs consolidated gains against the dollar after Friday’s soft U.S. data weakened the greenback. The dollar weakened across the board after CPI data showed inflation in the U.S. rose less than forecast. This stoked expectations that QE3 may be likely in the future.
EURUSD opened in Asia at 0.13179 and traded sideways all session, supported above 1.3160 as investors paused to wait for the next catalyst before committing to a direction. A lack of economic data during the session kept the mood quiet. On Friday, the euro jumped over 100 pips against the dollar after the CPI data, to hit a high of $1.3185.
GBPUSD surged to 1.5859 on Friday and traded a range between 1.5826 and 1.5847 in Asia on Monday.
The euro-yen pair was able to make gains in the Asian session, with EURJPY rising to 110.14, which is the highest level since October 31 of last year. The single currency had an advantage over a predominantly weaker yen, which has been declining sharply ever since the Bank of Japan eased policy last month. Meanwhile, the euro has recently stabilized following the approval of the Greek bailout package.
USDJPY traded sideways between 83.34/55, slightly off eleven-month highs. The dollar had risen sharply recently after the BOJ policy easing weakened yen. However, any further gains in the greenback against the Japanese currency will now depend on future U.S. inflation data and how long markets expect the Fed to stick to its low rates policy.
NZDUSD opened in Asia at 0.8250 and rose early to a high of 0.8275 on the back of positive New Zealand data. The Westpac McDermott Miller consumer confidence data rose to 102.4 in the March quarter from 101.3 in the December quarter.
AUDUSD traded higher compared to Friday and opened the week at 1.0591, climbing to a high of 1.0614. Reserve Bank of Australia Governor Glenn Stevens speech earlier today was somewhat supportive of the aussie as he showed confidence in China’s growth. China is Australia’s major export market.