Consolidation was the theme in Asia after the sharp moves in the market Thursday that saw the USD lose ground against EUR, AUD, CAD, NZD and GBP in NY trading. The SNB intervention to weaken the CHF and the strong gains in U.S. stocks both contributed to fresh demand in carry trades and renewed risk appetite that weighed on the USD, JPY and CHF. USD-JPY, which had rallied in early NY to highs of 98.52, consolidated in Asia mostly between 97.13-98.06. EUR-USD consolidated in a tighter range of 1.2892-1.2935, underpinned by further gains in EUR-CHF which saw the cross trade to 1.5398 and the highest levels since December. EUR-JPY consolidated above 126.00 most of the session, and the highest levels since early January and this also underpinned the EUR. Cable, despite the rally in late NY, could not break above 1.4000, pulling back to lows of 1.3879 as a result as traders cut longs. A key factor for the Asian session was the speech by China's Premier Wen who gave no more concrete stimulus measures though promised more help, but stating that reaching an 8% growth target would be difficult. He also said that the decisions on the CNY would only be made by China and also said he was worried bout China's reserve assets in the U.S. This last comment may have helped underpin U.S. treasury yields but gains were not extraordinary. Treasury yields are were also seen supported by the strong gains in Asian stocks with the Nikkei up over 5%. Nymex crude held just under $47 after the strong gains Thursday in NY on talk of Russian supply cuts.
