USD/JPY Marches Toward Cycle High Ahead of BOJ
An upbeat ADP employment report boosted USD/JPY back above 94.00 while cable fell to a two year low. The dollar was the best performer on the day while the yen lagged. Brazil's central bank added a hawkish tilt while the Bank of Canada removed one. The US dollar is the best performer so far in 2013 and upbeat economic data continues to show why. February ADP employment rose 198K compared to 170K expected. The numbers set of a round of US dollar buying that lasted throughout the day. Tune in for Ashraf's webinar on Thursday 16:00 ET, 21:00 GMT here
USD/JPY touched 93.00 yesterday in Asia but has climbed steadily since, reaching 94.13 today. A rally above last week's highs near 94.50 would likely trigger stops and a test of the important 95.00 level.
The pound is back in the doldrums, falling below 1.50 in early Asia-Pacific trading and tumbling as low as 1.4946 – the lowest since July 2010.
The Canadian dollar was also an underperformer as the BOC underscored slowing domestic growth but removing its hawkish bias and saying 'rates will remain appropriate for a period of time'. USD/CAD jumped 40 pips and is close to a cycle high.
On the flip side, Brazil's central bank dropped a line in its statement saying rates will remain stable for a 'sufficiently prolonged period'. This is a shift toward rate hikes and demonstrates that emerging market growth is accelerating.
The Bank of Japan decision is the highlight of Asia-Pacific trading but it's likely to be a non-event as Governor Shirakawa leads his final meeting.
|ADP Employment Change|
|198K||172K||215K||Mar 06 13:15|
|ADP Employment Change (FEB)|
|198K||150K||215K||Mar 06 13:15|