• Yen positioning is undoubtedly the main factor at play in the FX market with heavy Yen shorts starting to book profits:
  • Risk sentiment has been very strong in recent weeks with equity markets rising strongly and this of course underpins currencies like the AUD:
  • Activity has also been high in the commodity markets, led by a runaway iron ore price, another pro-AUD factor:
  • Debt markets have been generally well behaved with EZ auctions heavily over-subscribed in the main, a factor which should be pro-EUR in the short-ish term:
  • Tomorrows ECB meeting is also impacting on FX market trade, although no change is expected in either policy or statement: