BoJ Hold Rates As Expected

Daily Forex Fundamentals | Written by AC-Markets | Feb 19 09 09:26 GMT |

Market Brief The Usd bullish momentum was tempered slightly in the Asian session and we expect this theme to continue thru the day. The EurUsd traded back up to 1.2595, after trading to a 1.2529 session low, while the USDJPY has also come off its 93.96 high to trade around 93.40. Asian indexes are continuing their US lead, with Nikkei currently up 0.33%. The Gold surge carries on, with prices breaking previous resistance levels and holding at $975oz. ETF buying provided strong momentum to the upside, putting the $1000oz closer in sight. Despite the temporary pullback in FX themes today we expect the Usd will continue to appreciate mid term. In US news, within yesterday's FOMC minutes was the Fed announcement of new longer-term economic projections, which included a long-term inflation goal of 1.7 - 2.0%.The inflation goal is a clear move towards inflation targeting. Yesterday's BoE minutes revealed that the BoE decision to cut rates by 50bp at its February meeting was approved by a vote of 8 - 1. Again, the lone dissenter, Blanchflower, who is expected to retire in May, voted in favor of a 100bp cut. As expected, the BoJ held rates steady at 0.10%. The Jpy continues to lose ground against the Usd, as political instability threatens market perception of the government's ability to navigate in this challenging global and domestic economic environment. Ex-Finance Minister Nakagawa's resignation following the G7 debacle, was just another confidence eroding event in Prime Minister Aso troubled tenure. We are cautious in pursuing recent Jpy weakness due to historical safe have status. However we will be watching for any opportunity to build short Jpy positions. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.