ASIA SESSION: Quiet FX Markets as Equities Melt....

Currency markets ended the week in a peaceful fashion despite the fact that equities were disintegrating across the globe. The action was clearly present in regional stock markets which posted losses on average near 2% while the currency markets lazily remained near dollar highs. Earlier in New York poor data out of the US as well as concern for the health of European banks helped drive the dollar higher as a safe haven play. Today’s Asian session saw the dollar hold on to those gains in yet another relatively quiet session.

The EUR/USD, although off of New York lows of 1.4270, remained just off of those levels between 1.4290 and 1.4340 for Asian trade amidst a lack of data and news. GBP/USD recovered from earlier lows of 1.6420 to move in a range between 1.6500 and 1.6470 while the AUD/USD hit weekly lows near 1.0320 as the commodity currency struggled with the risk off atmosphere.

Looking at the other safe haven, the yen, and we have pretty much the only action that presented itself today. USD/JPY was skimming along the 76.50 level, just about 25 pips off of all time lows, when the pair went through a few stops to eventually blast over 76.95 in what was another false alarm for BOJ intervention. With the yen near all times highs and the BOJ constantly ramping up the rhetoric, markets are pretty much resigned to the fact that intervention will take place at some unexpected time in the near future if things do not change.

Of note is Gold, XAU/USD, which blasted to all time highs over $1845.00 as the continuous waves of market uncertainty took their toll on investors looking for shelter. With only a smattering of critical data up next week, traders will continue to focus on news and the upcoming Jackson Hole Symposium which will be attended by most central bankers and finance minister from around the world. The two day meeting begins on August 26th. Have a great weekend…