FX Update: The dollar corrected for a second straight session
FX Update: The dollar corrected for a second straight session, led by 1%-plus declines in USD-JPY. The greenback is amid its biggest correction the currency has seen since Trump's election on November 8. Momentum indicators had been flashing overbought, and remarks from ECB Stournaras downplaying what he said on Friday, that it was too early to talk about tapering of the QE program, provided a cue to buy EUR-USD. The pair rose by over 0.5% in making an eleven-day peak at 1.0685. The dollar also posted 11-day lows versus the Australian buck. USD-JPY saw the biggest magnitude of dollar losses in tumbling to a three-session low of 111.36, putting in some distance from Friday's eight-month peak at 113.90. USD-JPY had conversely been leading broader dollar gains since the U.S. presidential election, and it seems natural that the pair led today's dollar correction, while there was also talk on social media of month-end Japanese demand for yen. This transmuted into declines in EUR-JPY and other yen crosses, and weakness on the Tokyo stock market.