Week in FX Asia – Bank of Japan Dissapoints Markets with Inaction Yen Rises | OANDA Forex Blog

 

This week the Bank of Japan found out just how harsh and fickle a mistress the market can be. The BoJ was the darling of the market and the shining example of how a central bank should intervene. Tuesday Governor Haruhiko Kuroda and the Japanese currency suffered the brunt of the market’s criticism for their lack of action. The currency rose to 96 and has continued to rise as the week progressed. There were expectations that the BoJ would increase its monetary stimulus.

Comments from the influential Mr. Yen summed up the feeling around Prime Minister Shinzo Abe’s third arrow of reform. Eisuke Sakakibara is pessimistic given the proximity of elections. Abe can’t introduce new reforms until fall to avoid compromising the results of the elections. Abe’s bold statements and follow through by Kuroda was seen as the one-two punch needed to get Japan back on track, but the expectation was that they would not stop there.

Sakakibara does not expect reforms before or after the election and adds his voice to the critics of Abe’s third arrow of reform as the first arrow of BoJ intervention is lacking in long-lasting impact.

Next week Japan will continue to be part of a G8 meeting where there could be rumblings of currency intervention. Although with the current state of the Yen this is less likely as the weakening could be unsustainable. The G8 might have suspected this from the start. Industrial production indicators will be released as well as foreign investment which will give insight on how well Abenomics is working on the real economy and investment.

• Bank of Japan Member Suggests Limiting QE to 2 Years
• China Inflows Rise in May
• China Forex Purchases Rise in May
• Investors Reassess their Outlook for Japan
• Australian Employment Beats Expectations in May
• World Bank: Next Big Risk for Asia is Rising Interest Rates
• World Bank Cuts Growth Forecasts – Asian Stocks Decline
• Machinery Orders Rise in Japan
• Japan Farm Union to Continue Opposing TPP Trade Agreement
• BOJ not panicking as JGB yields volatility “normal”
• Mr Yen Pessimistic About Major Reforms in Japan
• Bank of Japan Policy Unchanged Disappoints Markets
• Central Bank Fears Strengthen Yen
• RBI’s Moves Limited by Record Low Rupee
• Japan Considers Tax Reforms to Boost Corporate Capital Spending
• Japan Current Account Surplus Doubles from Last Year
• China Leaders to be Tested on Resolve
• A China Downturn Could be Lengthy
• More Pressure Likely on Abe’s Growth Strategy
• Japan’s Economy Forecast Raised to 4.1% vs initial 3.5% estimate

WEEK AHEAD

* AUD RBA Meeting’s Minutes
* GBP Core Consumer Price Index
* GBP BOE Inflation Letter
* USD Consumer Price Index
* GBP Bank of England Minutes
* USD Fed Interest Rate Decision
* USD FOMC Economic Projections
* USD Fed’s Monetary Policy Statement and press conference
* EUR Producer Price Index
* CHF SNB Interest Rate Decision
* BOE Bank of England Minutes
* CAD Bank of Canada Consumer Price Index

Week in FX Asia – Bank of Japan Dissapoints Markets with Inaction Yen Rises | OANDA Forex Blog

Week in FX Asia – Bank of Japan Doubles Bond Buying Weakens Yen

 

The Bank of Japan (BoJ) captured the attention of the foreign exchange world last week when it started to live up to the expectations of the market. After much anticipation, and lots of preceding rhetoric, Governor Haruhiko Kuroda announced the BoJ’s plan to double its bond buying efforts to reach the 2% inflation target in the allotted two-year window. It was his comments on Prime Minister Shinzo Abe’s inflation goals while still at the Asian Development Bank that might have won him the top job at the Japanese central bank. Earlier this week, the program kicked into gear and the JPY lost 4% versus the USD and 5% versus the GBP. The main beneficiaries have been Japan’s exporters and holders of Japanese stocks with the Nikkei Index reaching new highs on the value of the yen.

The decision has not been without its critics and some, such as George Soros, cautioned that the fall in the yen could be “an avalanche” that the BoJ could not stop if the Japanese people start to sell the currency. China and South Korea remain critical of the move, branding it a currency war before the Group of Twenty meeting last February. This week, the negative criticism persisted, but the words used were “monetary blackmail” instead of “currency war”. Those ugly words have not been uttered since the Group of Seven made it clear that as long as Japan’s monetary easing means are used for domestic aims, it does not imply unfair currency manipulation.

• Asian Currencies Set for Biggest Gains Since September
• BOJ’s QE Won’t Unleash Hot Money, Unlike Fed
• Corruption Clean Up push China Growth Higher
• Rate Decision Leads to South Korean Bonds Slide
• Strong AUD/USD continue to hurt local businesses
• Stocks in Asia continue to trade higher
• Fitch Downgrades Chinese Local Debt
• China Exports Miss Forecasts With Data Quality Suspected
• Asian Economies Still Susceptible to Europe Fallout
• China’s March Consumer Prices Rise 2.1% From Year Earlier
• Skepticism abound on improving Chinese Export Data
• Sliding Yen Drives Japan Gains From Trade to Consumers
• IMF’s Lagarde: BOJ’s policy good for promoting global growth
• Nikkei Up Nearly 3% but Yen Slumps
• BOJ Moves Leads to Weakest Yen Since June 2009
• China President Xi not upbeat about global recovery
• Chinese Local Government Debt Soaring

WEEK AHEAD

* CNY Real GDP
* AUD RBA Policy Meeting Minutes
* GBP Consumer Price Index
* EUR Euro-Zone Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* USD Consumer Price Index
* NZD Consumer Prices Index
* GBP Bank of England Minutes
* CAD Bank of Canada Rate Decision
* USD U.S. Federal Reserve Releases Beige Book
* CAD Consumer Price Index

Week in FX Asia – Bank of Japan Doubles Bond Buying Weakens Yen | OANDA Forex Blog

Week in FX Americas – When Will The Loonie Begin Its Real ‘Fall From Grace’?

 

Why is the CAD not any lower? Gold is off $60, crude is down $3 and Friday’s US data disappointed. As per usual, for an uninteresting currency that has been trading in a contained range so far this year, it is not surprising to witness a delayed reaction. The market should expect the loonie bears to come out of hibernation and finally want to sell some of their CAD dollars.

The currency bears will point to Gold’s long-term support levels been broken – there is danger that this move lower continues. The next real level of support for the yellow metal is around the $1475 area. It will be very interesting to see how the commodity bulls will react first thing next week.

There was no real news that sparked the Friday afternoon gold move lower. It feels like the commodity bulls finally lost interest and threw in the towel. Prudently, we should expect more investors to step aside so as to wait and see how far this market shake out progresses. Many have to be wondering what the logic is behind this move especially with central banks globally, and specifically Japan, ramping up the money printing.

With the lack of domestic developments, the CAD remains beholding to external headlines. With domestic order books remaining relatively thin topside, prices continue to find better bids on dips for now – however the game plan could change Sunday night.

• USD/CAD Reaches 1.01 on Demand for Riskier Assets2013–04–07
• US Budget Deadlock Dissolving2013–04–07
• Economists see 3% US growth for 20132013–04–07
• Obama to Send to Congress 3.7 trillion budget2013–04–07
• World Trade Organization Cuts 2013 Trade Forecast2013–04–07
• Bill Gross buying up Treasuries
• Risk of Fourth Summer Slump for U.S. Fed2013–04–07
• Global Economy is in for Another Tricky Year2013–04–07
• Strategists Are Bullish on the U.S. Dollar2013–04–07

WEEK AHEAD

* CNY Real GDP
* AUD RBA Policy Meeting Minutes
* GBP Consumer Price Index
* EUR Euro-Zone Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* USD Consumer Price Index
* NZD Consumer Prices Index
* GBP Bank of England Minutes
* CAD Bank of Canada Rate Decision
* USD U.S. Federal Reserve Releases Beige Book
* CAD Consumer Price Index

Week in FX Americas – When Will The Loonie Begin Its Real ‘Fall From Grace’? | OANDA Forex Blog

Week in FX Europe – EUR/JPY’s 12-Big Figure Move Dominates EUR demand

 

The EUR’s direction this week should have been influenced more by Euro fundamentals – but it was not. The 17-member single currency has ended up being pushed and pulled by a screaming yen that happens to be supported by the BoJ’s aggressive monetary easing program. In hindsight, this week’s asset and forex moves have more to do with the markets anticipation of what the Japanese investor will be doing and not what they are actually doing.

The EUR reached its “prudent” breaking point on Friday. This months EUR/JPY 12-big figure move beckoned long positions to take some profit off the table – with JGB yields rising instead of falling post BoJ is undermining this one directional trade. A healthy trade requires some breathing space and by booking profits for whatever reason – JGB’s getting slammed, headlines on Cyprus asking for more money or Italy needing to raise +EUR60-billion in more funding – that instigates an “orderly retreat” only proves the ‘worth’ in that overall trade.

It is a tad surprising that weaker US retail sales data and consumer sentiment did not produce more dollar buying against the EUR. The market seems comfortable buying EUR’s on dips, despite the daily technicals looking overbought. With not decent sign of a turnaround just yet, buying dips “safety in numbers” remains the number one course of action.

Next week it should be a quiet start to the week with no data from the UK or elsewhere in the Eurozone. There are no auction to even speak of, which should leave investors to ponder over what was said and not said at the Euro-finance ministers meeting in Dublin and possible event risk from North Korea.

• Cyprus President wants more EU “assistance”
• More Jobs Available in London
• German Finance Minister Declares MOU for Cyprus is Ready
• French President to Eradicate Tax Havens
• Spanish Industrial Output Falls 6.5 percent in February
• Focus on Austerity May Lead to ‘Endless Depression’ for Europe
• Political Instability adds to French Woes
• Even as Confidence Gains, U.K. Economy Will Struggle
• Weidmann: No Bank is Safe. Winding down possibility remains.
• European Commission warns Portugal on Breaking Austerity Agreements
• French Oil Companies Upset at double standards for Geothermal Energy Drilling

WEEK AHEAD

* CNY Real GDP
* AUD RBA Policy Meeting Minutes
* GBP Consumer Price Index
* EUR Euro-Zone Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* USD Consumer Price Index
* NZD Consumer Prices Index
* GBP Bank of England Minutes
* CAD Bank of Canada Rate Decision
* USD U.S. Federal Reserve Releases Beige Book
* CAD Consumer Price Index

Week in FX Europe – EUR/JPY’s 12-Big Figure Move Dominates EUR demand | OANDA Forex Blog

Week in FX Americas – Boring Loonie Continues A Sideways Chop | OANDA Forex Blog

 

With no North American data to bully the loonie on Friday, the interest and commodity sensitive currency ended the week trading rudderless in another tight boring range. Many investors have shifted their attention to the euro-zone developments. Last Thursday, the 2013-14 Canadian budget was delivered amid little fanfare and with no impact on the CAD. The only thing of note was the reaffirming of Canada’s Triple-A credit rating, a recognized seal that is quickly becoming a rare attribute bestowed on developed countries.

After last weeks employment numbers, many investors were positioned and expected some modest bullishness from the currency. In hindsight, domestic macro drivers have been too mixed to give the loonie clear direction. Several analysts believe the divergence between Canada’s services and manufacturing sector will end up being temporary. With Canadian households remaining cash rich and a banking sector amongst the strongest globally, certainly favors the currency. Once the unknown Cypriot variable is played out and remains contained, the loonie should finally break out of its current range. For now, the sideways chop continues with range trading being the best strategy.

• Lets not forget about Sequesters: House on track to pass deep cuts to budget
• Bernanke Says Fed May Alter Bond Buying
• Sales of Existing U.S. Homes Have Likely Climbed to Three-Year High
• Bernanke Reassures Markets Easing to Continue
• New US Home Rise in February
• Canadian Manufacturing Sales Drop 0.2 percent in January
• Bernanke Gets Hold of Fed Messages
• QE’s Impact Coming to an End

WEEK AHEAD

* USD Fed’s Bernanke Speech
* USD Durable Goods Orders
* USD Consumer Confidence
* GBP Gross Domestic Product
* CAD Bank of Canada Consumer Price Index Core
* EUR Unemployment Change
* USD Gross Domestic Product
* USD Reuters/Michigan Consumer Sentiment Index

Week in FX Americas – Boring Loonie Continues A Sideways Chop | OANDA Forex Blog

Week in FX Europe – Another Last Minute Houdini Act from The ECB? | OANDA Forex Blog

 

Despite concerns about Cyprus and an unexpected drop in this month’s German business confidence numbers, the 17-member single currency is rounding off the week trading higher against most of its major trading partners. Many participants still expect the ECB to perform another one of its Houdini acts. Capital Markets remain composed; most likely due to the fact that investors have gotten used to the last minute Euro-solutions. They are clinging onto hope that Cyprus will get a deal done over the next three-days.

In a worst-case scenario – Cyprus having to leave the Euro-zone – some investors are holding on to the belief that the ‘buck’ stops with the island country and no widespread contagion will actually occur. While traders are taking profit on the short EUR positions ahead of the weekend they are also selling their long winning dollar positions accumulated during this quarter. If by Monday and things do actually go “pear-shaped” for the market, any EUR weakness may only be brief as the ECB will be quick to react to calm the markets through their OMT or the ELA programs.

• German Ifo Sentiment Index Falls as Crisis returns to Europe
• Europe Considering Closing Cyprus Banks and Asset Freeze
• EU Bailout Ultimatum Leads to Possible Cyprus Euro Exit
• Turkey May Block Natural Gas for Cyprus Bailout Negotiations
• Cyprus may enact new laws to prevent bank runs
• Russia and Cyprus Discuss Banking and Natural Gas Deals
• The UK Budget Doesn’t Help the Pound
• Cyprus Bank Closure Extended to 26 Mar as Solutions Sought
• Portugal FinMin Recovery will Take Decades
• IMF Lagarde Apartment Searched for her role in 1997 Case
• Euro Drifts Toward 4-Month Low Below 1.29
• Cyprus Rejects Bailout Tax on Deposits
• French Finance Minister EU Cannot Lend Cyprus more than 10 billion
• Europe Car Market Shrinks 10 percent in February
• Vote on Bailout Levy Might be Postponed as Official hope to Modify to Avoid Defeat
• Merkel Bows to Public Discontent Considers Capping Executive Pay
• German ZEW Increases in March
• Draghi and Cyprus Not Seeing Eye to Eye
• Cyprus Parliament Unlikely to Pass Levy Vote
• EU wants 5.8 Bln From Cyprus no matter what
• Cyprus Bailout a Reality Check

WEEK AHEAD

* USD Fed’s Bernanke Speech
* USD Durable Goods Orders
* USD Consumer Confidence
* GBP Gross Domestic Product
* CAD Bank of Canada Consumer Price Index Core
* EUR Unemployment Change
* USD Gross Domestic Product
* USD Reuters/Michigan Consumer Sentiment Index

Week in FX Europe – Another Last Minute Houdini Act from The ECB? | OANDA Forex Blog

Week in FX Asia – Is Future Yen Weakness A Myth? | OANDA Forex Blog

 

Certainly a concern to the lemming bear Yen trades out there is that USD/JPY price action has very much disappointed after the BoJ leadership sailed through Japan’s parliament. Buying USD/JPY has been the “no brainer trade” to date, fueled by better than anticipated US fundamental data and supported by the expected reflation BoJ efforts next month. Even this week’s US Retail Sales and claims headline is supporting the dollar, more so now that US yields are on the move. One risk is that US yields could eventually undermine the “long-tooth” equity rally. Rumors of an unscheduled easing measure right after Kuroda takes office has taken the Yen in the direction Japanese PM Abe has pointed all along. Abe’s aide talk about 98-100.0 being “fair-value” levels should become self-fulfilling.

The Bank of Japan will be under new management from March 20th, which is widely expected to lead to the implementation of more aggressive monetary policy, perhaps as soon as April. It looks like this market wants to sit on their hands until then. There are market suggestions that an unscheduled Bank of Japan policy meeting may take place immediately after the new BoJ governor takes office on March 20th. This move would obviously allow time for BoJ staff to study “the practicalities of any new easing proposals before a final decision can be made at the scheduled meeting on April 3-4.” Until then USD/JPY can only do one thing and that’s stay relatively bid. One wonders now how much longer other Asian central banks can go without reacting to the weak Yen threat?

The loudest section of the forex market is trying to bully the masses into believing that holding the dollar is the best chance of a winning hand. More analysts are now expecting the ‘mighty’ buck to sharply outperform GBY, JPY and AUD and some of the other noted G10 members, thanks to higher US yields and an improved US balance sheet. But, where is domestic Japan? The Yen weakness started in September and gathered momentum mid-November when the full dollar bullish breakout above 81.0 occurred. Risk appetite was strong back in September due to Draghi’s OMT and also QE3 announcement and by November Shinzo Abe arrived on the scene and Abenomics began. To date this has been predominately an offshore currency move. Where is domestic Japan? The Japanese housewife has yet to be sold on the weak yen story. They are needed to fulfill PM Abe’s dream.

• Japan Lower House Approves Kuroda as BoJ Governor
• Australia Adds 71,500 Jobs the Biggest Increase in 13 years
• Freely tradable Yuan in 5 years?
• Drought Worsens as Kiwi Dollar Touches 6-Week Low against Aussie
• USD/JPY Moves to 96 Before Japan Opposition Announces BOJ Nominee Stance
• Pre Owned Chinese Home Sales Soar to 280 percent
• North Korea Concern Sees Won Trade Near One-Month Low
• Thai Baht Climbs to 19 Month High
• Australia and N.Z. Dollars Move to 4-Year Highs Against Yen
• RBI’s $91 Billion Bond Buying Makes Fight Against Inflation Challenging
• Hong Kong Authorities Increase Regulation and Taxes to Curb Housing Bubble
• Kuroda Stresses Speed Important in Achieving 2 Percent Inflation Target
• China Inflation Up due to Lunar New Year Festivities
• Central Banks Buying Up AUD Bonds
• N.Korea Threatens Nuclear Warfare
• Higher Yuan Allays US Concerns
• Aussies Buying Homes on Lower Interest Rates

WEEK AHEAD

* AUD RBA Policy Meeting Minutes
* GBP Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* GBP U.K. Chancellor Osborne Presents 2013 Budget to Parliament
* EUR German Producer Prices
* GBP Bank of England Minutes
* GBP Jobless Claims Change
* USD Federal Open Market Committee Rate Decision
* NZD Gross Domestic Product

Week in FX Asia – Is Future Yen Weakness A Myth? | OANDA Forex Blog

Week in FX Europe – Is Sterling’s Magnetic Option Ride Over? Maybe Next Wednesday | OANDA Forex Blog

 

Sterling’s wild magnetic ‘option’ strike ride (1.4950,1.5150) over the last two-trading sessions has managed to knocked many weak short cable positions out. Governor King himself provided added fuel – “the recovery is in sight”- the only thing in sight is his impending retirement. His comments that sterling had probably weakened far enough prolonged the painful short-squeeze. This market may have misinterpreted his comments. Why would he be talking up the pound?

Sterling’s fall from such lofty heights has been swift, so much so that it had become a market congested with only sellers. Any ‘reversal-of-fortune’ would of course be rapid and costly – exactly what investors have been exposed to since Thursday. In truth, this market has become too fixated on a straight pound move.

At the same time, the 17-member single currency has managed to have its way with the “mighty dollar,” which would suggest more of a dollar move rather than a pound fixation. The dollars strength has come a long way and its only natural to witness a partial retracement. US data this week confirms that their economy is the best performer amongst the G4 major currency regions, whilst the UK entertains a triple-dip recession scenario.

If you believe in King, then his remarks this week will likely have watered down expectations for more QE next month. The techies will love it; an excuse to signpost that the low is in and that 1.50 is the new base. However, all the good work could come undone by next Wednesday’s annual UK Budget report when Treasury could change the inflation-targeting remit of the BoE.

• Majority of Europe Wishes to Exit Austerity, not Germany
• Greek Troubles Continue as Statisticians used as Scapegoats
• Bank of Italy Asks Lenders with Losses not to Pay Bonuses or Dividivends
• Greek Bailout Talks for Next Tranche Delivery Break Off
• Irish Bond Auction a Success
• UK Cameron Getting House In Order
• French President Admits Country will miss Deficit Targets
• UK Manufacturing Drags GBP Down
• German Central Bank Governor Warns Crisis not Over
• Merkel Coalition Partner Agrees with The Chancellor on Euro
• German Imports Rise in January

WEEK AHEAD

* AUD RBA Policy Meeting Minutes
* GBP Consumer Price Index
* EUR German ZEW Survey (Economic Sentiment)
* GBP U.K. Chancellor Osborne Presents 2013 Budget to Parliament
* EUR German Producer Prices
* GBP Bank of England Minutes
* GBP Jobless Claims Change
* USD Federal Open Market Committee Rate Decision
* NZD Gross Domestic Product

Week in FX Europe – Is Sterling’s Magnetic Option Ride Over? Maybe Next Wednesday | OANDA Forex Blog

Week in FX Americas – Is the Loonie and ‘Big’ Dollar Move for Real? | OANDA Forex Blog

 

No one was close to reporting the North America jobs numbers. Canada and the US headlines blew all forecasts out of the water, and for the time being have convinced the market that they need to buy North America.

Both countries’ released improved unemployment rates. The downtick to the US unemployment rate to +7.7% from +7.9% can partly be attributed to Americans dropping out of the workforce. Analysts note that the participation rate fell to +63.5% last month from +65.6%, which is now officially the lowest rate in 33-years. This is probably the only obvious knock against this months NFP release. On the surface, it’s not a very healthy way to achieve a jobless rate decline and it will be used as fodder for the pro-stimulus members at the Fed.

The +51k busting print for February from the Canadians is very much a showstopper. However, it’s worth noting that their job survey is usually very volatile because of the much smaller sample. The fulltime print of +33k new jobs has the loonie ‘strutting’ on the crosses with very little been given up.

CAD is dominant in EUR/CAD, CAD/JPY and against its commodity cousin the AUD. Along with the stateside job numbers, the release provides a good bullish argument to want to own the loonie now that the rate dealers have priced out any chance of a Central Bank rate cut this year after the BoC meet in mid-week. Now we have to wait and see if momentum is carried over into next week.

• Loonie Rallies As Employment Numbers Beat Street
• All except 1 Bank Passed Fed’s Stress Test
• US Trade Deficit Rebounds in January due to Oil Imports
• Obamacare Is Costing Jobs and Sales Says Beige Book
• USD/CAD Moves to 1.0320 Central Bank Says Rate Appropriate
• US Orders for Goods Fall 2 percent in January
• US Treasury’s Fall: Equity Gains Dampen Insurance Demand
• U.S. Dollar Remains Lower Versus Majors Before Beige Book
• Talks Continue on U.S. Spending Cuts
• Dollar Index Trades Near 6-Month High
• ‘Avoid Currency Intervention’ U.S. Tells G–7
• Managed Exchange Rates Create Tension Says US Treasury Official
• US and China Strike Tentative Deal on North Korea Sanctions
• US 10′s Under Pressure on Speculation Services Expanded
• WTI Crude Rebounds From 10-Week Low
• Obama Offers Medicare and Social Security in Latest “Grand Bargain”
• No Progress on Sequestration Talks

WEEK AHEAD

* JPY Japanese Parliament Vote on BoJ Governor Nominations
* EUR German Consumer Price Index
* USD Advance Retail Sales
* NZD Reserve Bank of New Zealand Rate Decision
* AUD Employment Change
* CHF Swiss National Bank Rate Decision
* USD Producer Price Index
* EUR Euro-Zone Consumer Price Index
* USD Consumer Price Index

Week in FX Americas – Is the Loonie and ‘Big’ Dollar Move for Real? | OANDA Forex Blog

Week In Review February 24th to March 1st

 

Week in FX Europe – EURO Wallowing In No-Man Land
The EUR received only temporary support from a surprise uptick in Spanish manufacturing data early Friday. The 17-member currency hastily lost it all when other Euro-zone activity headlines began to disappoint. For now, the dollar is back in demand despite the US sequester cloud that kicks in with automatic spending cuts later today. The overall tone in Europe’s financial markets remains subdued ever since it was announced that Euro-zone banks would sharply scale back their early repayment of funds from the ECB’s three-year lending operations next week. In total +EUR12.5b is to be repaid, a sharp drop from last week’s +EUR62.8b. Negative news flow continues to have an impact on Euro regional funding markets.
EUROPE Week in FX

Week in FX Americas – Loonie Split Personality
The CAD currently possesses some untameable traits. Just when you think the “big”; dollar has safe haven dominance across the board, long CAD trades are back in vogue despite the negative economic headlines. It is thought that too many short CAD positions were trying to call the shots on Friday early, eventually allowing the USD to back down from its weekly highs. For a brief period, Canadian tepid economic growth and potential worries about the US sequester dragging on US growth, strengthened demand for safe-haven Canadian government bonds. However, it seems that investors extracted signs of economic resilience in the otherwise lackluster Q4 gross domestic product report and embraced the fact that the data was not any poorer, had the loonie rallying.
AMERICAS Week in FX

Week in FX Asia – Kuroda Nominated to BoJ Governor
Japanese Prime Minister Shinzo Abe nominated Asian Development Bank President Haruhiko Kuroda to lead the Bank of Japan. Kuroda has previously stated when he was in the running for the nomination that the 2 percent inflation target set by Abe was realistic and could be achieved in a 2 year timespan. Kuroda is a proponent of aggressive monetary easing, and will likely be an important ally of Prime Minister Abe in his attempts to kick-start the anemic Japanese economy Kikuo Iwata, a professor at Tokyo’s Gakushuin University and BOJ Executive Director Hiroshi Nakaso were nominated for the two deputy governor positions. Current Governor Masaaki Shirakawa and his deputies will step down on March 19.
ASIA Week in FX

WEEK AHEAD

• EUR Euro-Zone Producer Price Index
• AUD Reserve Bank of Australia Rate Decision
• EUR Euro-Zone Retail Sales
• AUD Gross Domestic Product
• EUR Euro-Zone Gross Domestic Product
• CHF Gross Domestic Product
• CAD Bank of Canada Rate Decision
• JPY Bank of Japan Rate Decision
• GBP Bank of England Rate Decision
• CNY Manufacturing PMI
• GBP BOE Asset Purchase Target
• EUR European Central Bank Rate Decision
• JPY Gross Domestic Product
• EUR European Central Bank Rate Decision
• USD Change in Non-farm Payrolls
• CAD Unemployment Rate

Click here for more details on the week’s activity