Forex Market Update: U.S. Dollar, Japanese Yen Rebound on Profit-Taking, Risk Aversio

The dollar and JPY regained some ground in Asia on Thursday as profit-taking set in with currencies near the top of their recent trading ranges, and as a precaution after the steep currency gains this week. Traders were also wary ahead of the earnings report form JPMorgan, Google and IBM later today. Other factors also emerged later in the session to temper risk appetite with Fitch posting a negative outlook for NZ’s rating after affirming the current AA+ rating. Also eyed are the reports that rescue talks for CIT failed which is seen leading to bankruptcy and RealtyTrac report new record gains in U.S. foreclosures. These all served to temper the buoyant mood that emerged this week, fueling risk appetite. China’s GDP at 7.9% was above expectations but had been leaked in the Chinese press ahead of the official announcement, dampening some of the impact. Asia stocks were broadly higher but gains were capped by profit-taking. Oil remains above $61 and U.S. treasury yields eased after the CIT and RealtyTrac reports emerged.