FX Views
EURUSD
Continued talk of higher rates for Europe keeps EUR bid after the intervention calmed investors fears of a financial melt down.
Major central banks intervened to sell JPY to the tune of 2 trillion by just the BoJ alone.
With this fear taken out, looks like risk is back on e table hence we see USDJPY, EURUSD and AUDUSD back where we started early last week.
EUR may probably see a test of 1.43 or higher if this continues.
AUDUSD
Should benefit from the improved risk appetite and a tech at 1,0150 cannot be ruled out this week or possibly 1.0250 even.
USDJPY
Look at the liquidity injection from intervention and the promise to pump more liquidity into the Japanese money markets as a Quantitative Easing for Japan and it should drag JPY lower just as it did the ISD since Aug 2010. Possibly see USDJPY test 83 or even higher in the coming weeks.

Fx views

EurUsd Hawkish comments from several officials left the market speculating higher Euro interest rates. I don't think this is likely so soon. Perhaps EUR has strenghened on back of a little disappointing US jobless claims. German local elections will bring to the fore the issue of their contribution to the Greek rescue. This will have implications to derail the formalization of the permanency of a EFSF in e Euro zone if the local elections don't go well. Watch this space. I thinly that's why EUR has not been able to pierce convincingly 1.3750. Whilst short term, I feel it's still bid, I fear it's losing momentum. Break of 1.3430 should see this fall swiftly back to target 1.30 in the coming weeks. AudUsd On the back of better risk appetite, AUD is again bid above 1.01. The highs at 1.0250 has to be taken out soon or AUD is likely to retest par and below on the back of China again raising it's RRR to now 19.5%. local rates are starting to follow suit on the back of higher commodity prices but to a lesser extent oil. This could put e pin into AUD bullishness given that RBA is unlikely to be raising interest rates till H2. Asian central banks are now on the offensive or will be on the offensive to dampen inflation flames and this could reduce the attractiveness of the carry trades. Asian carry traders beware and be careful not to be too bullish even if AUD breaks 1.02. Countries like Singapore are starting to want to let their currencies appreciate to combat inflation and others are likely to follow suit with monetary measures. Cad is seen as a good alternative. A little later on this GbpUsd Sentence talking again about inflation and rates but their economic data continue to look weak. I feel GBP strength cannot be sustained and an adjustmment maybe in store. 1.6350 resists and if long, I would turn short with stops above 1.6350. UsdJpy PM Kans facing fragmentation and this could affect the support for his fiscal plans. Mid-east tensions may continue to keep this slight bid but topside 83.80 holds court. UsdCad Oil and mid east tensions continue to fan the bullish sentiment for the Looney. Apparently foreign investments has spiked up given the low yield of keeping the currency idle. Stay long Cad for target 96.30