HALISTER1: INSIDE G-10: Dollar Trades Mixed in Thin Volumes as Oil Rallies

INSIDE G-10: Dollar Trades Mixed in Thin Volumes as Oil Rallies

(Bloomberg) -- The dollar is mixed vs G-4 currencies in tight trading ranges, with several European markets shut for the Whit holiday.
  • Oil rallies to six-month high, shrugging off weak China data as Nigerian production disruption adds to supply concerns
  • USD/JPY gains 0.2% to 108.87, vs 108.47-108.99 range
    • Pair may be on the verge of resuming its broader bear trend after coming off a week showing multiple failed attempts at breaking the 109.46 Fibonacci resistance
    • USD/JPY 1-mo. forwards points decline and pair’s 1-mo. implied volatility rises as settlement dates go across the BOJ’s June 15-16 meeting: Yoshihito Ichiguchi, Mitsubishi UFJ Trust and Banking
    • PM Abe says in parliament that fiscal measures may be needed to create demand
  • EUR/USD +0.1% at 1.1320
    • Resistance at 1.1359, May 10 low; support at 1.1283/71, May 13 low, 55-DMA
    • EUR risk-reversal spread at 2011 low on Brexit hedges: analysis
    • Offers seen at 1.1330, 1.1360 and above 1.1400; bids at 1.1285-00, 1.1250 and 1.1225-30: traders
  • GBP/USD down 0.1% to 1.4348, while 2-mo. implied volatility rises to highest since March 2009
    • Leveraged funds reduced their net short positions on sterling to the lowest since Dec. in the week ended May 10: Nomura says citing internal and CFTC flows
    • Fitch says an exit from the EU by the U.K. would hit European economies and increase political risks in Europe
  • BBDXY little changed at 1,186.56, vs 1,185.05-1,188.04 range
    • Index tests key resistance and a short-term move might be shortly indicated by technical patterns
    • U.S. presidential election could add to FX uncertainty: ING
  • AUD/USD up 0.3% to 0.7291, reversing losses earlier in the session on intraday short-covering from leveraged funds
    • Resistance is 0.7310, May 12 low
    • AUD better bid on macro inflows vs NZD and JPY than USD: trader
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Yoshihito Ichiguchi (Mitsubishi UFJ Financial Group Inc)

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