It’s all about the risk mood still so far today and with equities looking sluggish once again after yesterday’s drop, there isn’t much comfort for risk trades on the day. The yen and franc are staying bid in European morning trade, with pressure seen on commodity currencies once again.
USD/JPY is holding lower around 113.93 with large expiries seen @ 113.85-90 perhaps keeping price action more limited for now.
USD/CHF did drop from 0.9150 to 0.9120 as we are seeing more safety flows play out in European morning trade. This comes as regional indices are keeping losses of over 1% on the day currently.
Looking at commodity currencies, AUD/USD has undone its good work from the stronger Australian jobs data yesterday in a 0.5% fall to 0.7185. Meanwhile, USD/CAD continues to keep a defense of its 200-day moving average at around 1.2520-30 levels now:
Elsewhere, the kiwi remains pressured and is the major laggard today being down by 0.7% to 0.6710. That sees NZD/USD close in on key support near 0.6700 and if that gives way, expect a steeper drop potentially to 0.6500 next for the pair.
