Eyes on G7

Although the week in Asia ended on a very quiet note, the G7 meeting over the weekend in Marseilles, France certainly has the potential to begin next week with a bang.In the mean time, all eyes were on US President Obama’s much ballyhooed job’s speech today, which looked to help boost poor approval ratings as well as the employment rate. The president came out swinging, announcing a larger than anticipated $450 billion job creation plan that included numerous strategies including tax cuts. The comments helped to modestly boost risk, pushing the EUR/USD up from the sub 1.3880 level to eventual highs near 1.3930. The GBP/USD saw 1.5990 highs, but in both cases the moves were fleeting and slowly eroded back to unchanged on the day.

The AUD/USD caught some bids in response to the Obama speech as well, seeing a few stops on the way to almost 60 pips of gains to 1.0635. Chinese CPI came in lower than anticipated at 6.2% versus 6.3%, but failed to illicit moves like it had done in the past. The Aussie was giving up gains late in the day as well, quickly approaching 1.0600 and the London open approached.

While the Japanese yen failed to make any noteworthy moves today, it is prudent to mention market rumors that have been floating around the markets today. With the G7 meeting this weekend in France, Japanese Finance Minister Azumi has made it known that he will plead his case for a weaker yen at the summit, causing many to speculate that another round of BOJ currency intervention may be on the table. The G7 has routinely maintained that it wants a consensus before any further intervention from the BOJ and it remains to be seen if the G7 will reach such a consensus. Regardless, the start of next week will surely have traders on their toes in anticipation of a BOJ move, whether unilateral or coordinated…..Have a great weekend.

Source: Forex.com

09.09.2011