FX Update: Narrow ranges have been prevailing
FX Update: Narrow ranges have been prevailing among the main currencies, despite Wall Street closing strongly higher, the MSCI Asia-Pacific index hitting five-week highs, the 10-year Bund yield hitting a record low, and a the 10-year U.S. note yield printing a its lowest closing level in 21 months. USD-JPY has drifted moderately lower, to levels around 108.35 after scaling intraday highs just above 108.60 earlier in Tokyo trading. The dip reflects a pick up in demand for the yen, which has also seen EUR-JPY and AUD-JPY drift back from intraday highs. EUR-USD, meanwhile, has remained within a 15 pip range so far today, centred on 1.1195, holding above the 16-day low seen yesterday at 1.1161, which was the product the eyebrow-raising dovish about-turn of ECB's Draghi yesterday. Cable edged out a rebound high of 1.2569, putting in a little distance from the five-month low printed yesterday at 1.2506. AUD-USD similarly lifted out of trend lows, earlier seeing a peak of 0.6885, which is 44 pips up on yesterday's five-month trough. The Canadian dollar, buoyed by a 4.5%-plus rally in oil prices over the last day, has seen some moderate outperformance, which has taken USD-CAD to a three-session low at 1.3365. Underpinning oil prices (aside from Mideast geopolitics) and equity markets have been hopes for a strongly dovish signal from the Fed today, yesterday's dovish shift by the ECB chief, and news that President Trump will be meeting with President Xi at the upcoming G20, and that ministerial-level trade negotiations will be recommencing.