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29 Apr 2013
Forex Flash: JPY Longs in favour as EUR awaits ECB - UBS
FXstreet.com (Barcelona) - UBS Strategists Gareth Berry and Geoffrey Yu note that the yen was again net bought on the week, with asset managers continuing to lead the way.
They add that Hedge funds also showed liquidation but by their standards the amounts were not extreme. Further, the daily distribution of flow was quite telling: heading into Thursday investors were broadly flat USDJPY but on Friday there was a mini capitulation once it became clear the BoJ were not going to deliver anything new that could surprise that market. They write, “We also note that gross volumes in USDJPY were also the lowest in four weeks, and this was the same for JPY trades as whole.
Elsewhere, they note that EUR didn’t find much joy either, especially on the EURUSD leg as corporates engaged in their biggest selling week in three months, with asset managers not far behind. Some advance pricing of the anticipated ECB cut in May has occurred, which also points to strong chances of a bounce if no further rate action is hinted while growth policies come into play
They add that Hedge funds also showed liquidation but by their standards the amounts were not extreme. Further, the daily distribution of flow was quite telling: heading into Thursday investors were broadly flat USDJPY but on Friday there was a mini capitulation once it became clear the BoJ were not going to deliver anything new that could surprise that market. They write, “We also note that gross volumes in USDJPY were also the lowest in four weeks, and this was the same for JPY trades as whole.
Elsewhere, they note that EUR didn’t find much joy either, especially on the EURUSD leg as corporates engaged in their biggest selling week in three months, with asset managers not far behind. Some advance pricing of the anticipated ECB cut in May has occurred, which also points to strong chances of a bounce if no further rate action is hinted while growth policies come into play