The Japanese Yen soared in Asian trade as regional share prices declined, offering a familiar lift to the standby anti-risk currency. The US Dollar also traded higher, with the baseline unit appeared enjoy a degree of haven demand. Indeed, prices tracked Treasury bond futures upward, with both moving inversely of contracts tracking the S&P 500.
The sentiment-sensitive commodity bloc currencies understandably bore the brunt of selling pressure in such conditions. The Australian Dollar suffered the lion’s share of punishment after the RBA nudged official rhetoric toward the dovish end of the policy spectrum. In the statement accompanying a decision to hold the cash rate at 1.5 percent, Governor Lowe painstakingly signaled standstill for the foreseeable future.
Looking ahead, a relatively lackluster offering on the European data docket will be followed by similarly second-tier releases out of the US. That leaves the door open for policymakers’ pronouncements to take the spotlight. Remarks from ECB President Mario Draghi and Fed Governor Dan Tarullo are on tap. Neither occasion looks to be meant as a policy speech but a degree of headline risk remains.
On the risk appetite front, US stock index futures continue to point downward ahead of the opening bell on Wall Street. While European bourses seem to be faring better than their Asian counterparts in early trade, this warns that investors’ mood is cautious at best. If another risk-off wave sweeps markets as North America comes on stream, the greenback and the Yen may build on overnight momentum.
Asia Session
European Session
** All times listed in GMT. See the full DailyFX economic calendar here.
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