Emerging markets finally take a breather
- South American EMs were relatively quiet overnight but not before INR and TRY made fresh lows against the USD;
- Profit taking also emerged in US Treasuries with dip-buyers emerging;
- USD/JPY looks most interesting of the majors, with traders eyeing important technical levels ahead of 99.10;
- AUD/USD recovered on the back of AUD/JPY buying and has managed to stabilise around .90 cents;
- The GBP lost some of its gloss, with short-term profit takers the main driver after dovish comments from the BOE Weale;
- EUR/USD has steadied around 1.3350 with decent orders reported 70 pips either side; buyers at 1.3280 and sellers near 1.3425.
I reduced my cable longs yesterday but am still long AUD/USD. USD/JPY seems to be the great unknown factor here; if it breaks higher then the USD is likely to gain across the board (at least once the cross flows have dried up).
I’m expecting a quiet day today given that EMs quietened down overnight.