Forex Flash: Time for a reality check - OCBC Bank

FXstreet.com (Barcelona) - Emmanuel Ng of OCBC Bank notes that majors tumbled against the dollar overnight on heightened risk aversion and renewed global growth concerns with the NZD, AUD, and CAD leading the way lower against the USD (and trailing their G10 counterparts).

Meanwhile, he sees that JPY jumped across the board as risk appetite shrank after China reported disappointing Q1 GDP numbers. He adds that late in the NY session, news reports surrounding the Boston bombings compounded the market´s nervousness. Looking ahead, he adds that markets may continue to trade with a cautious tone ahead of the G20 meeting on Thursday, with investors likely wary of further position adjustments across different asset classes. Specifically, the recent US Treasury report highlighting the Yen may keep Yen bears sidelined in the near term. He writes, “On our end however, we do not expect much opposition from the G20 with regards to yen developments and any ensuing rhetoric is not expected to be unduly strident.” In a nutshell, he feels that last night´s price action across the different asset classes may have been the result of a market that has been fed a consistent diet of quasi-positive headlines for too long, and the Chinese data miss provided a convenient catalyst for profit taking... or in short, “a reality check”.