Europe FX Markets Open

The USD is broadly weaker as the JPY and AUD lead gains, driven respectively by Japanese fiscal policy rumors and hawkish RBA rhetoric. Markets are also monitoring persistent deflation in China and upcoming U.S. employment data.

Key Takeaways

• 1.The JPY is strengthening as shorts are pared and markets react to a potential Japanese plan to use FX reserves for government funding, viewed as 'stealth intervention'.
• 2.The AUD/USD rose 0.6% following hawkish comments from RBA's Hauser regarding inflation targets.
• 3.China continues to face deflationary pressures with January CPI and PPI data coming in weaker than forecasts.

Table of Contents

• Market Briefs
• Looking Ahead - Economic Data (GMT)
• Looking Ahead - Events, Other Releases (GMT)
• Commentary and Analysis
• JPY still bid across the board in Asia
• Most EUR pairs hold own in Asia, EUR/JPY major exception
• AUD/USD heads towards major resistance on RBA comments
• GBP/USD-Edges higher on broad dollar weakness; GBP/JPY sags
• Katayama plan to use FX reserves USD/JPY-negative

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