Forex Investment and Currency Trading

FT reports Barcap looking at takeover targets …… Lehman and UBS cited, Home Depot reported a disappointing quarter, Stocks in Europe and Asia decline, and reported stops above the 200 day in the S&Ps

EUR - Euro moved in a vertical fashion overnight on the back of reported buying by China ahead of the 1.5560 level and more significantly comments by Franz, the head of the ZEW Center, that the ECB will potentially raise rates. Dollar longs established over the past few trading days were flushed out after Franz stated that ” My expectation is that the ECB will raise interest rates in the near future”. All eyes are now trained on German IFO due tomorrow.

AUD - The Aud is trading higher after RBA minutes - where it seems they spent considerable time discussing the case for a further rate rise, as the committee notes that inflation is uncomfortably high. One interesting comment from the statement “that members thought that the rise of the exchange rate over recent months had been less than might have been expected given the strength of commodity prices”. Audusd has decent support at .9550 and trades bid but is being held back at the moment by consistent AUDJPY selling ahead of 99.00.

JPY - BoJ left rates unchanged, identified that the economic slowdown is evident while noting that the risk of inflation was rising globally. Japan Post Bank to step up its overseas investments.