Forex Asia – Slow markets as sentiment still damp, gold hits a new record

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EURUSD opened in Asia at 1.4379 and eased slightly to 1.4360 to continue the downtrend from Friday as market sentiment is still damp as investors fear a euro zone debt crisis. The pair hit a session high of 1.4392 as Asian bourses moved higher before paring gains and closing down at 1.4368. Lack of significant economic data today resulted in no clear direction for the euro dollar. However the market focus this week will be on U.S Fed Chairman Bernanke speech at an economic summit in Jackson Hole, Wyoming, where he is expected to provide some hints on how policymakers plan to tackle the turmoil in financial markets.

 

GBPUSD opened in Asia at 1.6465 little changed from the Friday close until mid session when cable rose to a high of 1.6508, mirroring EURUSD moves. The pair headed back down to close at 1.6484

 

USDJPY opened Asia at 76.74, gapping up from Friday’s close of 76.52. But the pair quickly moved down to 76.55 even though Japanese Finance Minister Yoshihiko Noda repeated again today that he is closely watching the markets and could intervene to curb yen strength. There was no BOJ intervention though, but the markets were surprised by a sudden big spike up in the U.S. dollar, hitting 77.20 within two minutes but soon dropped to 76.91 where it consolidated. Traders cited a large buy order from a large U.S. bank that was short covering.

 

The Australian dollar opened Asia at 1.0379 against the U.S. greenback and advanced to a high of 1.0439, lifted by Asian equity markets moving higher. AUDUSD soon pared most gains to close down at 1.0392 as risk sentiment is still low.

 

Gold continued to climb to hit another record high hitting $1,878.22. Risk aversion still reigned in all markets pushing investors to move their funds into the safe haven investments to protect themselves against risk due to a sluggish U.S. economic outlook and euro zone debt.