September 13th - Yet again there has been little cause for excitement in currency markets through the overnight session and with the economic calendar slowing down somewhat at the mid-point of the week, any meaningful direction may have to wait just a little longer. There does seem to be some surprise that the market responded in such a muted manner to yesterday??™s widening US trade deficit ??“ something that arguably should have initiated a degree of dollar selling - but overall it seems as if traders remain focused on data due ahead of the weekend break ??“ namely retail sales and the CPI readings ??“ then next week??™s FOMC meeting before deciding whether the greenback is looking overbought after the recent run of gains. With this longer term perspective in mind it??™s perhaps of little surprise that the Yen has held relatively steady in recent trade against the dollar despite a growing trade surplus being reported out of Japan. This has essentially broken the trend for Japanese economic data covering July which has been universally softer than expected but certainly looking at the bond market, expectations are for further downbeat readings to be seen and again it??™s difficult to imagine where a BoJ rate hike is going to come from ??“ something that has now been underlined with the recent release of the central bank??™s latest monetary policy meeting minutes.


Stuart Scrase