Forex Market Update: EURUSD Price Action Contained Around 1.3000

The dollar was mostly unchanged in Asia, largely driven by a purported large EUR-USD 1.30 option strike that kept the currency pair in a very tight 1.2980-1.3012 range for much of the session. Pressure on AUD-USD, NZD-USD and GBP-USD was seen during the morning, linked to a slide in JPY crosses which in turn were reacting to the decline in the Nikkei in morning dealings. However all the currencies recovered once the Nikkei bounce in the afternoon. USD-JPY is seen consolidating in a range within 97.50-98.50 but remained at the lower end of the range in Asia in response to the early JPY cross sales. Asian stock markets were flat to higher by the afternoon with the only exception a slide in Shanghai with DJIA futures posting minor 22 pt losses. Oil retreated in Asia after the rise in inventories that was reported in NY on Wednesday. Banks continue to raise their growth forecasts for China, with Morgan Stanley the latest, increasing their GDP call to 7% from 5.5%.