GBP playing catch-up in the race to the bottom

The FOMC surprisingly took a breather from the currency race to the bottom and the GBP has now joined the Yen as the interim leaders. The RBNZ was vociferous yesterday in trying to talk the Kiwi lower and its clear that nobody wants a strong currency.

I expect USD/JPY to consolidate in coming days/weeks between 92/95 whilst some of the other currencies play catch up. Cable is leading the way and the fall below 1.5250 really opens up the downside. The EUR should remain fairly stable against the USD but with short-term sentiment now pro-USD, a break below 1.3260 should open the way for a move to 1.3060. Nevertheless I remain bullish on crosses like EUR/GBP, EUR/CHF and EUR/AUD.

The AUD/USD has now confirmed resistance at 1.0375 and I expect to see a test of 1.0200 in the next few sessions.