Risk-Off Increases on US spending Cuts, BOJ’s Goal Weaker Yen | IFCM
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Risk-Off Increases on US spending Cuts, BOJ’s Goal Weaker Yen - 4.3.2013

Euro versus the greenback remained in 1.2964/1.3040 intraday range, insight of the Eurogroup meeting, where Cyprus bailout is expected to be discussed as well as the political uncertainty in Italy. At the same time Unemployment in Spain increased by 59.4K in February, better than market consensus of 77.5K increase and at a slower growth rate than in January. Positive news from the Finance ministers meeting could trigger a retracement in the EURUSD pair after bearish development in February. Australian dollar against the US dollar declined to fresh 7-month lows earlier today at 1.0114, since the Building Permits were worse than projections. Adding to the latter was that US government spending cuts triggered before lawmakers reach any budget deal, increasing pressure on higher yielding currencies like Aussie. Nonetheless in intraday trading the AUDUSD recovered, most likely on profit taking by short sellers and was lastly seen at 1.0142. The USDJPY is fluctuating between 93.28/93.70 near-term range, not far from record highs at 94.29 as developments had mixed effect on trading. The Chinese government applied measures to control increasing property prices while China’s services PMI dropped to 54.5 in February from 56.2 in January inducing Shanghai Composite index to fall by 3.65%, raising Yen as a safe currency. However, Yen weakened on BOJ nominee, Haruhiko Kuroda, saying that the size and type of asset purchases is not enough to achieve 2% inflation goal, thus market participants are expecting further monetary easing in the following meeting.
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