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The buck continues to get slammed to new lows on any form of a rally, with market participants growing increasingly convinced that the once mighty USD has now officially lost its status. There have been articles out from many major newspapers each day discussing the fall of the greenback and this has not helped to bolster any confidence in the buck. Moreover, there has been little to no effort on behalf of US officials to defend the beleaguered currency. This in conjunction with a market holding a healthy risk appetite and looking for more attractive yield, continues to weigh on the prospects for the USD. Overnight data from China reinforces, after the economy produces some robust trade figures, which helped to boost the higher yielding currencies to fresh 2009 highs. The USD Index has also managed to plummet to a fresh 14-month low. Australian consumer sentiment impressed to the upside, with Aussie rallying to highs by 0.9150, while Kiwi could also not be stopped, despite concerns from the FinMin over the strength of the NZD. In Japan, as expected, the BoJ kept its call rate unanimously unchanged at 0.10%. However, it was comments from FinMin Minezaki that generated more attention, after the official said that the USD weakness was likely to persist. This has helped the Yen to outperform across the board on the day, up some 0.80% against the USD. Interestingly enough, the broad based USD weakness has not prevented a concurrent weakness in the Yen crosses, which traditionally warns of an elevated risk aversion. Looking ahead, UK employment data is set for release at 8:30GMT, followed by Eurozone industrial production (1.2% expected) at 9:00GMT. Commodities remain very well bid with gold approaching $1100.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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