Forex Asia Review – U.S. Dollar rises against Yen

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The Euro edged up slightly against the Dollar to ease off its lows from Friday as traders expected a bout of short-covering to give the single currency a temporary reprieve. The Euro has been down since E.U interest rates were kept on hold last Thursday and there are increasing views that after a possible July hike, the possibility of further rate increases are slim. Also, the Greek debt-issue so far appears to be nothing more than stop-gap measures and are not a concrete viable solution since views within the Troika are diverging further. EURUSD briefly rose to 1.4356 lifted by buying on dips from 1.4323, then closed the session at 1.4341.

 

Sterling traded in a tight range in Asia. It is in consolidation mode after falling to a two-week low against the Dollar on Friday, weighed down by a decline in UK industrial output. Data showed UK industrial output contracted by 1.7 percent in April far below the forecasted 0.1 percent increase. Meanwhile, the Bank of England’s decision Thursday to hold interest rates unchanged as well as the perceived view of no rate hikes until next year has dampened the Pound. GBPUSD traded between 1.6246 and 1.6215.

 

The Japanese Yen made losses against the Dollar. USDJPY gained over 40 pips from 80.25 to 80.68 in Asian trading, slowly clawing back up from one-month lows reached last week, lifted by Dollar demand by Japanese importers. Also, the Yen was affected by declining stocks as Japan’s Nikkei 225 dropped 0.8 percent to 9,441.34 after the government reported that core machinery orders fell unexpectedly in April by 3.3 percent from the previous month.

 

Trading was thin in Australia as markets are closed there for a bank holiday. The Aussie was in a range against the greenback, as it does not have any reason to advance at the moment and remains near its lows after being weakened by weak jobs data on Thursday, and growing views that the central bank of Australia is reluctant to raise interest rates soon. After being lifted by dip-buying to a session high of 1.0561 UADUSD dropped again to close at 1.0541.

 

Spot gold was range bound all session taking on a consolidation mode after falling on Friday by almost 1 percent, its biggest one-day decline in a month. The precious metal traded between highs of $1,532.53 and lows of $1,526.93. Markets are waiting for any new events that will cause a flight to safety in the safe haven investment. The current Greek crisis is keeping the precious metal buoyed but also investors are keeping an eye on the U.S. economic situation and what policy stance the Fed will take after its current $600 billion asset purchase program ends this month.

 

EURUSD USDJPY GBPUSD AUDUSD EURJPY GOLD
OPEN 

(22:00 GMT)

1.4323 80.25 1.6230 1.0531 115.01 1530.65
DAY’S HIGH 1.4356 80.68 1.6246 1.0561 115.64 1532.53
DAY’S LOW 1.4320 80.24 1.6215 1.0523 114.97 1526.93
CLOSE 

(06:00 GMT)

1.4341 80.52 1.6228 1.0541 115.50 1530.13

Note: Daylight Saving Time is in effect for GMT