ASIA SUMMARY

With a shortened holiday week in some parts of the world and US non-farm payrolls tomorrow, Asia saw most currency pairs consolidate around their NY close. Earlier in NY we saw EUR/USD trade through 1.3400 and it continues to hold above the 1.3420 area. USD/JPY has held repeated tests of the 118.50 level and is helping to hold EUR/JPY up. EUR/JPY traded higher in London/NY and is poised to retest the multi-year highs just in front of the psychological 160 level.

Those looking for a quiet market could be surprised if they sit back on their heels though. Last Thanksgiving saw the breakout in EUR/USD through the psychological 1.3000 level. With many currency pairs at multi-year highs, the risk remains of an extension of recent trends or a severe correction.

Looking ahead to next week, we may see some positioning in front of the following week’s G7 meeting. Recently, there has been some speculation whether the JPY will be mentioned. With EUR/JPY testing near multi-year highs, we could see heightened concern of the weakness in the JPY in the coming week.

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