ASIA SUMMARY

With China back from Golden Week, Asia traded in a wider range as the dollar sold off. Dollar sellers were helped by better than expected Australia retail sales which came in at 1.1% month over month vs. expectations of .5%. AUD/USD rallied through short term resistance at .8260 and through .8300. We also saw buyers in EUR/USD and GBP/USD as well as sellers in USD/JPY following the release.

JPY crosses were weak with USD/JPY as EUR/JPY tested the 163 handle and is holding for now. There is some concern that Chinese Central Bank Chief Zhou may continue to express concerns about the parabolic move higher in the Chinese stock market. The implication for the currency markets could be a sell off in the JPY crosses as traders look to reduce their risk.

USD/CAD has also continued to trade heavy and is not far from multi-year lows. With commodity currencies strong, could they be leading a resumption of the dollar move lower?

Upcoming Data Release (UK Session):

EC: (3:30am EDT) EU Finance Minister hold meeting. (4am EDT) ECB’s Trumpel-Guguerell speaking in Brussels.