• All of the action happened in the first few hours with the GBP and JPY falling heavily.
  • Cable was sitting at 1.5250 on Friday when news of the Moody’s downgrade broke. It fell to 1.5170 in late NY and fell heavily in early Asia bottoming at 1.5075.
  • Many see this as an overreaction as the news was expected; we could see a gap closure back to 1.5250.
  • GBP bear trend is very strong and real-money selling is likely to intensify so be careful if picking bottoms.
  • EUR/JPY closed in NY at 123.15 and traded to 125.30 in early interbank trade in a ridiculous overreaction to news that the dovish Kuroda is likely to take over at the BOJ. The pair dipped back to 123.90 in early Tokyo.
  • HSBC China manufacturing PMI was down to 50.4 from 52.3 last time.
  • The AUD slipped lower on the day, driven by risk-aversion surrounding the UK downgrade and the China number, and also weighed on by AUD/JPY profit taking.
  • Somebody won an Oscar.