The Yen went from being the strongest currency in early Asia, courtesy of stop-loss hunting practices, to end as the weakest, together with the Swiss Franc, also being weighed down by talk of an unofficial soft floor in EUR/CHF at 1.05-1.10 doing the rounds. The rest of G10 FX saw subdued activity.
AUD/USD traded in a tight range, with negative news coming from the Chinese manufacturing sector over the weekend, after the official NBS Manufacturing PMI fell from previous 50.1 to 49.8 in January, while Monday's HSBC PMI was revised slightly lower from 49.8 (preliminary) to 49.7. AUD/USD saw its lowest in inter-bank trading circa 0.7730 before recovering towards 0.7790, as traders adjust positions ahead of the RBA policy decision on Tuesday, in which a more dovish RBA is expected, with the possibility of a rate cut not ruled out.
USD/JPY printed its lowest at 116.66 during inter-bank trading (around 5.45am Tokyo time, retail platforms were closed at the time) only to see a vigorous rebound to 117.85/90 after the stop-loss hunt aftermath. There was no catalyst attributed to the Yen appreciation in early trade, reinforcing the theory that the initial drop in the pair was almost purely incentivized by the hunt of sizeable stop sell orders sub 117.00 during one of the most iliquid times of the week. USD/JPY is now back into its familiar 117.00 - 119.00 range, as the Nikkei 225 recovers part of its early losses, currently around -0.5%.
The Swiss Franc was also a notable under-performer, after reports over the weekend, cited by Tages Anzeiger, noted that "the SNB was operating with a sort of unofficial minimum euro exchange rate, with talk of a “corridor” of CHF 1.05 to 1.10 says a well-informed source." Meanwhile, the Euro had a better bid tone at the start of the week, following news that Greece is set to repay its debts to the ECB and IMF, while it hopes to reach a deal with the EU soon, according to Greek PM Tsipras, in a statement e-mailed to Bloomberg News on Saturday.
AUD/USD traded in a tight range, with negative news coming from the Chinese manufacturing sector over the weekend, after the official NBS Manufacturing PMI fell from previous 50.1 to 49.8 in January, while Monday's HSBC PMI was revised slightly lower from 49.8 (preliminary) to 49.7. AUD/USD saw its lowest in inter-bank trading circa 0.7730 before recovering towards 0.7790, as traders adjust positions ahead of the RBA policy decision on Tuesday, in which a more dovish RBA is expected, with the possibility of a rate cut not ruled out.
USD/JPY printed its lowest at 116.66 during inter-bank trading (around 5.45am Tokyo time, retail platforms were closed at the time) only to see a vigorous rebound to 117.85/90 after the stop-loss hunt aftermath. There was no catalyst attributed to the Yen appreciation in early trade, reinforcing the theory that the initial drop in the pair was almost purely incentivized by the hunt of sizeable stop sell orders sub 117.00 during one of the most iliquid times of the week. USD/JPY is now back into its familiar 117.00 - 119.00 range, as the Nikkei 225 recovers part of its early losses, currently around -0.5%.
The Swiss Franc was also a notable under-performer, after reports over the weekend, cited by Tages Anzeiger, noted that "the SNB was operating with a sort of unofficial minimum euro exchange rate, with talk of a “corridor” of CHF 1.05 to 1.10 says a well-informed source." Meanwhile, the Euro had a better bid tone at the start of the week, following news that Greece is set to repay its debts to the ECB and IMF, while it hopes to reach a deal with the EU soon, according to Greek PM Tsipras, in a statement e-mailed to Bloomberg News on Saturday.
