Forex Asia Review – Markets remain calm post-ECB; focus on US jobs

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EURUSD opened Asia at 1.3436 after rallying to 1.3449 in the previous session as market sentiment was optimistic after the ECB announced measures yesterday to contain the euro zone crisis and prop up banks through a new covered bond purchase program totalling 40 billion euros. The euro was steady in the Asian session and was little changed as markets await the important US non-farm payroll report later today. It is expected to show that more jobs were created in September.


GBPUSD opened in Asia at 1.5439 and extended the rally from the previous session to climb to a high of 1.5468 before settling. Yesterday the Bank of England announced a decision to expand quantitative easing to help stimulate the British economy. This initially weakened the pound but it soon bounced back up as market sentiment improved across the board and took a breather as the focus shifts to the US non-farm payroll report today.


AUDUSD opened in Asia at 0.9746 marking a new one week high. The Australian dollar rose after moves to support Europe’s ailing banks boosted risk sentiment after the ECB announced new 12 and 13-month lending operations for banks until 2012. Investors will now wait for key U.S. jobs numbers due later today.


USDJPY opened in Asia at and remained range bound for the rest of the session as market were calm after a busy trading day yesterday following monetary policy decisions from European and UK central banks. This morning the Bank of Japan also announced its interest rates, which as widely expected kept monetary policy unchanged and kept the key interest rate at a range of zero to 0.1 percent by a unanimous vote. The BOJ also decided to extend by six months a 1 trillion yen ($13 billion) loan scheme targeting banks operating in the area hit by Japan’s devastating March 11 earthquake and tsunami. Then yen remained steady after the rate announcement as it was anticipated.