The dollar was under renewed selling pressure in Asia, extending recent highs against the EUR and holding near recent trend highs in the case of AUD, NZD and GBP. A couple of catalysts for USD weakness was the FT story warning over the US triple A rating and comments on BBC from Japan's opposition party, the DPJ, that it would avoid dollar bonds. EUR-USD rallied to highs of 1.3722 early in the session before pulling back to 1.3663. USD-JPY, which was also pressured by reported foreign bond redemptions and bearish technical, fell to lows of 95.78 before bouncing back to 96.62. Commodities remained strong on the back of USD weakness and more "green shoots" from the rise in China's retail sales to 14.8% and the improvement in Japan's Economy Watchers survey for the fourth month in a row, with oil rising above $59 and gold up above $926. Treasury yields edged higher over the session, with Asian stocks markets mostly higher, though a pullback in Australian and NZ stocks were seen. The HKMA continues to intervene to maintain the peg, while the Bank of Thailand was also seen attempting to curb THB strength as investors return to emerging markets.
Al Bawaba
