Asian central banks are intervening again today, as USD strength continues. Through the session, Reuters has reported intervention on both the INR and IDR, with the IDR hitting a nine-month low earlier today and the INR at the weakest levels since Oct 2006.
The USD remained bid in Asian trading as investors continued to flock back the USD with Asian stock markets under broad selling pressure, some of them losing 2% by midday with the equity concerns linked back to Lehman in many cases. Factors seen adding to support of the USD was the surprisingly aggressive 50 bp rate cut by the RBNZ that sent the Kiwi through 0.6500. EURUSD was weighed down by heavy selling of EURJPY in a successful attempt to out 150.00 barrier options on the cross. Though commodities such as gold, oil and copper bounced in Asia, the market remains bearish for commodities with traders looking for $100/brl to break on oil after the reports in the New York Times that Saudi Arabia will ignore OPEC’s call for a cut in production. Central banks were again intervening in Asia against the IDR and the INR.