Asia Trading Session: Recaps from Trading Desk, October 1, 2007 11:01 PM

Published: October 1, 2007 11:01 PM

With no major economic releases, Asia continued the tone in London and New York by buying back the dollar but also took profit in the JPY crosses. EUR/USD traded lower after failing to regain 1.4250. USD/JPY tested 116.00 in New York but has since traded on the defensive as EUR/JPY finally found selling interest above the 165.00 level.

AUD/USD led the dollar bid tone as it pulled back from .8950 and fell below .8900. It looks like with the trade balance and retail sales as well as the Reserve Bank of Australia rate decision expected some traders wanted to take some profits off the table. Kiwi also traded lower in sympathy as it finally found sellers around the .7675 area.

Looking forward, it�s another pivotal week that ends with US employment data on Friday. Also, while the Bank of England and European Central Bank are set to announce rates unchanged, look for the market to keenly follow the usual rhetoric afterwards. So far other central banks have not followed the US by cutting interest rates but we could see some catch up especially if those respective economies start to show signs of weakness.

Upcoming Data Releases (London Session):

Switzerland: (1:45am ET) Month over month Consumer Price Inflation expected .2% vs. previous -.1% (relevance: medium).

UK: (4:30am ET) PMI Construction expected 63 vs. previous 64.8 (relevance: medium).