Rates as of 0500 GMT

Market Recap

A relatively quiet day in the FX market. The seemingly big move in NZD is only big in comparison to the other moves, which werent big at all. Normally I wouldnt even comment on a 0.2 move, which is what USD did overnight.

As for why NZD is lowerI have no idea and neither does anyone else that I could find, either. I would assume its just profittaking on yesterdays sharp move higher.

Looking at the massive 0.01 move in the JPY tradeweighted index today thats sarcastic you can see what an impact the Bank of Japan meeting had on the market virtually nothing. As expected, they didnt change any of their policy settings.

They did fiddle with their forecasts lowered their growth forecast for this year and raised their inflation forecasts for this year and the next two. However they still dont see inflation remaining above their 2 target level during the forecast horizon, so no chance of a change in rates at any time during the foreseeable future. This to me is a green light to sell JPY buy USDJPY.

The yen might not be moving very much but thats not the case with EURUSD, which is extremely volatile at least by historical standards.

One of the things we hope to get out of todays European Central Bank ECB meeting are some details about their proposed antifragmentation tool see below. The importance of that was underlined yesterday as PM Draghis coalition collapsed after three parties the League, Forza Italia and the Five Star…