Forex Market Review – Asian FX markets consolidate gains

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EURUSD opened at 1.2967 and traded a tight 1.2953-71 range with Asian markets being quiet ahead of the Asian Lunar New Year holiday. The pair mostly consolidated gains made on Thursday which was a big winning day for the euro following successful Spanish debt auction and positive US economic data. Further action could be a function of news on the Greek debt negotiations with private creditors. Any positive news could prompt investors to cut short positions in the single currency.


USDJPY and the JPY crosses consolidated gains seen on Thursday and Asian stock market buoyancy (especially for the crosses) helped support. EURJPY hovered near two-week highs hit yesterday at 100.05. USDJPY slid briefly from highs to 77.05 before later bouncing to 77.20. It has since eased again but remains above 77.00.


GBPUSD opened in Asia at 1.5486 and remained bid in a 1.5480-95 range. Cable was buoyed by EURUSD and higher Asian equity markets due to increased risk appetite.


AUDUSD opened in Asia at 1.0418 and headed down to 1.0400 as the risk-sensitive Aussie  eased following data showing that China’s manufacturers started 2012 in a sluggish mode.  China is Australia’s major trading partner. But AUDUSD remained not far from its two-month high struck earlier this week.


The US dollar index, measured  against a basket of currencies, was stuck near a two-week low, in the wake of the recent increase in risk appetite and investors moving out of the safe haven dollar. The ICE dollar index stood at 80.082 having dipped to 80.041 the previous day, its lowest level since January 4.