Previous session overview
A quiet day on the nuclear front in Japan is giving risk-sensitive currencies a lift, while the prospect of further central bank intervention has curbed yen appreciation for now.
Japanese authorities cited progress Monday in cooling the affected reactors at the Fukushima Daiichi Nuclear Power plant, as they continued to douse those reactors using fire trucks and water cannon.
The yen was weaker on the prospect of further moves by the G-7 central banks to sell it even though the safe-haven Japanese currency was supported by the ongoing military action in Libya and the surge in oil prices.
At 0720 GMT, the dollar was trading at JPY80.92, up from JPY80.60 in late New York trade on Friday; while the euro was at JPY114.67, up from JPY114.35, and at USD1.4176, down from USD1.4182.
Elsewhere, spot gold was at USD1428.00 per troy ounce, up USD10.10 from New York Friday.
The New Zealand currency also was up, changing hands at USD0.7335. The Swiss franc, meanwhile, sank against the U.S. dollar, reflecting the return of some risk appetite after last week's market shocks that resulted from fallout from Japan's earthquake, in particular the nuclear crisis.
The Pound held no resemblance to consumer confidence coming at record lows, as the BoE's involvement in co-ordinate intervention pushed the GBPJPY pair from JPY127.80 to higher near JPY132.53, simultaneously taking the GBPUSD along for the ride to trade as high as USD1.6256.
The Australian dollar pushed higher Monday in quiet trade, shaking off worries over Libya as Japan's nuclear crisis showed signs of easing. At 0526 GMT, the Australian dollar was changing hands at USD1.0015, up from USD0.9837 late Friday. Against the yen, it traded at JPY80.945, down from JPY81.35.
Market expectation
For now, much of the focus remained on the technical's surrounding the dollar, with analysts noting solid resistance around JPY82.00 and the risk of intervention on any dip towards JPY80. Others have noted JPY81.20 could be a difficult short-term resistance point.
Few economic data releases are scheduled from the U.K. or Europe. In the U.S., however, existing home sales data for February are due at 1400 GMT.
EURSEK is set to test support at SEK8.82/85 Monday after it crashed through the support level at SEK8.95, say dealers. This triggered a more profound downside reaction than anticipated. The pair must fall back beneath the 55-day moving average band to confirm that the recent correction has ended calling for fresh cycle lows, dealers added.
European stock markets are expected to open higher Monday, helped by gains in Asia overnight after Japanese officials announced that conditions at the Fukushima Daiichi nuclear power plant have continued to improve over the weekend.
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