The quiet week in Asia continued today despite the culmination of the US FOMC meeting earlier in New York which many believed would bring a clearer direction to the currency markets. While the dollar and the yen continued to slip from early highs posted in the NY morning the lackluster trading left a good deal to be desired. Meanwhile, a seemingly misguided bill to be presented to the US Senate will look to label China as a “Currency Manipulator” due to the country’s failure to raise the value of the Yuan. Despite threats of higher tariffs in what could erupt as a trade war, China stated that the arguments on the currency rate were groundless. With China currently the largest purchaser of US Treasuries, the US should be cautious in biting the hand that feeds it.
The EUR/USD was essentially lifeless for the first few hours of the day, stuck between 1.3760 and 1.3775, until a late move pushed it to highs just over 1.3785. GBP/USD coasted along the 1.5225 level for a good part of the session, while AUD/USD hit a 0.9215 high early, but spent the rest of its time near 0.9175 levels. Impressive housing starts data of +15.1% vs. +6.4% were unable to help support the Aussie dollar.
USD/JPY dipped to 90.03 but then roared to new highs near 90.60 on the back of the Bank of Japan announcing that it would double the 10 trillion yen lending program to a total of 20 trillion yen in an expected expansion of the program. Yen crosses where slightly higher with the weakness of the yen. Asian stock remained just above water as the day wound down, unfazed by BoJ commentary.
