Quiet Ahead of the Holiday Weekend

With the Easter weekend already underway in Asia the trading was thinned and the moves were minimal and should remain that way in London with almost every financial center closed for an extended weekend. Amidst the quiet trading conditions the US dollar remained moored near lows due to ongoing concerns of the huge national deficit and low yield of interest rates with no hope of a hike in sight. The EUR/USD spent the session wallowing in a 35 pip range between 1.4540 and 1.4575, while the GBP/USD was even tighter in a 20 pip range near 1.6510. The AUD/USD saw the most action with a quick stop driven drop to 1.0720, extending the range to 35 pips on the day.

The yen hardly budged from its 30 pip range as Prime Minister Naoto Kan announced a new $49 Billion extra budget to help earthquake and tsunami ravaged areas of Japan rebuild. The move was believed to be the first of possibly more future budgets enacted in order to help defray the cost of rebuilding in Japan. Yen crosses looked to end the session a touch higher amidst mixed equity markets. With the USD/JPY again creeping lower newfound concerns reemerge of the possibility of BOJ intervention in the FX markets, possibly once again in concert with the G7. Also something to keep in the back of your mind is the recent rumors that China is looking to conduct a large currency revaluation possibly to the tune of 10% in order to raise the Yuan in order to help battle inflation.

With the majority of Europe effectively out for the Good Friday holiday look once again for thinned markets ahead in the London Session. As well, keep in mind that Monday will be the Easter Monday holiday, and banks will be closed in Europe, as well as Australia and New Zealand to begin the new trade week. Have a great weekend, and Happy Easter….Enjoy the holiday.

22.04.2011