Ameriprise Abney Associates Financial: Yen Crosses Gather Downside Momentum On Risk Aversion

After failing to rebound earlier today, The yen crosses seem to be gathering downside momentum before the week closes. Risk aversion is a factor in driving the Japanese yen higher. European indices are generally lower, in particular, with the DAX down -110 pts, or -1.1% at the time of writing. Investors sentiments were weighed down by renewed tensions in Ukraine. US stock futures are pointing to a lower open too. The USD/JPY is taking the lead and breaches 102.02 minor supports and should be heading back to 101.32 level. The EUR/JPYand GBP/JPY are also seen dipping mildly.

Sterling recovers against dollar today as retail sales unexpectedly showed 0.1% mom growth in March. Markets expected -0.4% mom fall. However, strength was limited as BBA mortgage approvals unexpectedly dropped to 45.9k in March versus expectation of a rise to 48.9k. The GBP/USD is held inside tight range below 1.6841 temporary top and the sideway consolidation could extend further. Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc., The EUR/GBP is holding in tight range around 0.8230 while the GBP/JPY is already stays around 171/172. The pound is lacking a clear direction for the moment.

SNB president Jordan said today that "the environment remains extremely challenging for both the Swiss economy and our monetary policy." He reiterated that "with interest rates close to zero and a Swiss franc which is still high, the minimum exchange rate continues to be the SNB's most important monetary policy instrument." And, "an appreciation of the Swiss franc would entail a threat of deflation."

Japanese national CPI core rose 1.3% yoy in March, unchanged from February and was below expectation of 1.4%. Tokyo CPI core raised 2.7% yoy in April, versus expectation of 2.8% yoy. Most of the jump in Tokyo CPI came from the sales-tax hike on April. Taking away that impact, Tokyo CPI rose 1.0% yoy, unchanged from March. Also released from Japan, all industry index dropped -1.1% mom in February.

In Canada, the BoC governor Poloz said yesterday that "there is a growing consensus that interest rates will still be lower than we were accustomed to in the past." And, "after such a long period at such unusually low levels, interest rates won't need to move as much to have the same impact on the economy."

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