The divisive “risk off” theme has taken over the FX markets ever since the stunning fall of precious metals last week which was considered the largest daily decline this week in the past three decades. The shiny sought after yellow metal was off 9.7 % a day and silver was down 12 % per day.
The Japanese yen saw some solid ground after the publicised comments made by the United States Treasury last week that the Asian mogul should remain with its domestic implementations and targets while steering away from devaluation which basically means that purchasing JGBs is okay but buying foreign bonds is definitely not a wise move as of the moment. A warning was made ahead of the G20 summit as currently this is what precisely Japan is doing right now.
The commodity currencies are currently taking a knockout beating after the eventual failure in precious metals and pitiable Chinese date with the RBA minutes saying that there was no particular changes with their supposed ‘wait and see’ policy which constantly reminding markets that they have to expand their horizon in order to cut back whilst they measure the positives from the recent ‘cut’ suggesting that the Australian dollar is growing strong.
The appalling events from the recent Boston bombing hurled the market into a nose dive. While the Japanese yen is traded as a failsafe currency, the USD/JPY made an overnight low of 95.77 and the equity markets are looking for a stronger base, there hasn’t been a straight acceptable ‘retracement’ as the trade went back to 97.80.
Presently, it is all about the CPI day in the United States and the United Kingdom, along with industrial production and housing statistics from across the sector, with the ZEW survey from Germany which was released earlier this week.