The Japanese yen was the session’s biggest loser, as strong risk appetite worked against the currency after stocks in both Wall Street and Tokyo rallied. 10-year US Treasury yields also climbed to 2.36%, which was another supportive factor in favor of the dollar. Dollar / yen traded as high as 115.44, within striking distance of the 115.60 7-year high of the previous week. Euro / yen was also strong, scaling the 143 handle to trade at 143.31.
The yen received little support from a better-than-expected Japanese current account surplus for September, which came in at 963 billion yen rather than 534 billion that was expected. Strong investment income from overseas boosted the financial side of the current account.
The Australian dollar tried to rally above the 0.8650 level during the session on the back of a quite positive National Australia Bank business conditions survey and robust house price gains in the country during the third quarter. Subsequently it fell back to the 0.8615 level as the resurgent US dollar proved too strong for the aussie.
The remainder of the day is expected to be relatively quiet on the lack of important data and economic events. The US will also have the Veterans’ day holiday, during which the fixed income market will be closed which might also affect foreign exchange trading.