Forex Flash: Majors go their own way – OCBC Bank

Emmanuel Ng of OCBC bank notes that the major appear to be heading in their own directions today with EUR stepping higher ahead of the ECB meeting, GBP heading south and JPY weakening further.

He notes that the news that BoJ Governor Shirakawa revealed that he would step down on March 13th, almost three weeks than scheduled could a new leg in the JPY weakening. Meanwhile, he notes that investors lost their appetites for the AUD post RBA, while the weaker than expected US services lent little direction to the broad dollar. Overall, he thinks that the “Great Rotation” may continue to dominate FX price action in the near term.

Looking to the RBA, although he feels that the accompanying statement was discernibly more sanguine compared to previous statements in December 2012, the reiteration of the AUD’s incongruous valuation with softening export prices may have provided more fodder for Aussie bears. Ng finishes by writing, “While the RBA may be perceived to have shifted to a neutral stance for now, the lack of any urgency to tilt towards a tightening may continue to work against the AUD in the current environment.”