Asia Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jun 22 09 05:57 GMT |

The trade week in Asia has started out amidst uncertainty, with traders concerned about the potential powder keg in Iran as well as the US FOMC meeting on Wednesday. With the above noted concerns the safe-haven currencies, the Yen and Dollar, were the prime benefactors of investors looking for safer assets. The Yen most notably made solid gains against the Euro, Aussie Dollar, and Kiwi Dollar. EUR/JPY dropped from 134.28 to lows just near 133.15 despite gains in the Asian equity markets, this drop representing a continuation of the slide from 135.15 highs that began early on Friday as things looked tenuous in Iran. AUD/JPY fell from 77.55 to just under 76.60 and the NZD/JPY also dropped a solid 75 pips to 61.11 as traders abandoned the higher yielding and riskier currencies from down under. Risk aversion was put back on the play field as traders react to the perceived uncertainty and rising death toll in Iran. USD/JPY showed Yen strength as well, as the pair dropped from a 96.30 high to a touch below 95.80 as the day in Japan progressed, the Yen bounced back to a level near 96.00. With one eye on Iran, the other eye was surely on the upcoming FOMC meeting on Wednesday, with traders looking to see what direction the Fed will take in its rhetoric. Many see the Fed as walking a tight rope between possibly dampening the recovery with early rate hikes, or possibly over committing to keeping rates too low. Nonetheless, the Dollar was bought in Asia, with EUR/USD dropping from an opening high near 1.3957, to levels in the 1.3890 ballpark. AUD/USD weakened almost 90 pips to a 76.60ish low, and NZD/USD was weaker by half a hundred pips for the day as the Dollar was bought. This week could be a big turning point for the dollar as the FOMC should help give the Greenback a push in either direction. Upcoming Economic Data Releases (London Session): 6/22/2009 7:00 SZ Money Supply M3 YoY MAY 3.80% - - 6/22/2009 8:00 GE IFO - Business Climate JUN 84.2 85 6/22/2009 8:00 GE IFO - Current Assessment JUN 82.5 83 6/22/2009 8:00 GE IFO - Expectations JUN 85.9 86.9 Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.