The USD is pushing higher again - little behind it
As is usual for trading sessions these days, markets tend to free up a little once European markets are heading home. Given the lack of downside in the USD, NY names are trying to push the USD higher again, led by the usual suspects with EUR/USD trying to force its way below the midpoint in the 1.0900's while USD/JPY has once again reclaimed 107.00 despite stocks posting losses on the day.
One could assume that the risk tone is behind the USD bid, though the ranges are painfully tight, and it looks nothing more than a test given the support in the USD being tested unsuccessfully. As we noted earlier on, EUR/USD faced continued selling interest into 1.1000 and despite 5-4-5 attempts to push through here earlier today, failure has resulted in longs bailing.
Similarly, in USD/JPY, support in the mid 106.00's has again caused congestion to prompt a fresh move higher, with prices now not too far off levels seen in early Europe. That said, if the risk mood continues to worsen into the Asian session, we suspect there may be a renewed push to the downside. The S&P 500 is currently down 35pts on the day and the usual correlation is for a higher JPY, with modest CHF gains holding at present.
Elsewhere, Cable has taken out the lows seen ahead of 1.2200, though the move through the figure failed to generate any momentum and we are back on a 1.2200 handle for now.
AUD and NZD are also looking heavy, with the latter back under 0.6300 again, as AUD/USD continues to fight off sellers ahead of 0.6700. USD/CAD is edging higher also, ignoring the better than expected housing starts and building permits releases seen earlier in the day.