The Japanese Yen turned lower as upbeat earnings from Alcoa Inc dented demand for the haven currency. More of the same appears likely ahead.
Talking Points
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Japanese Yen Sinks as Risk Appetite Firms on Alcoa Inc Earnings
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Risk-On Mood Likely to Carry Forward Absent Other Catalysts
The Japanese Yen underperformed in overnight trade as Asian stocks advanced, denting demand for safe-haven currencies. The MSCI Asia Pacific regional benchmark equity index rose 0.3 percent, with sentiment buoyed by a better-than-expected fourth quarter earnings report from Alcoa Inc. The bellwether aluminum also offered an upbeat outlook for 2013, which traders interpreted as broadly supportive for risk appetite.
Looking ahead, the economic calendar is quiet Europe and the US. The earnings docket is likewise uneventful, leaving the aftermath of the Alcoa Inc report to continue playing out across financial markets as traders in Europe and the US get their chance to price in the announcement. S&P 500 index futures are moving cautiously higher in late Asian trade, bolstering the case for a risk-on mood ahead.
Asia Session: What Happened
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 21:45 | NZD | Building Permits (MoM) (NOV) | -5.4% | 1.7% | -2.0% |
| 0:00 | AUD | HIA New Home Sales (MoM) (NOV) | 4.7% | - | 3.6% (R+) |
| 0:01 | GBP | BRC Shop Price Index (YoY) (DEC) | 1.5% | 1.7% | 1.5% |
| 0:30 | AUD | Job Vacancies (NOV) | -6.9% | - | 4.1% |
| 0:30 | AUD | Retail Sales s.a. (MoM) (NOV) | -0.1% | 0.3% | 0.0% |
Euro Session: What to Expect
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
| 9:00 | EUR | Italian Deficit to GDP (YTD) (3Q) | - | 5.0% | Low |
| 9:30 | GBP | Trade Balance Non EU (£) (NOV) | -4200 | -4532 | Low |
| 9:30 | GBP | Visible Trade Balance (£) (NOV) | -9000 | -9539 | Low |
| 9:30 | GBP | Total Trade Balance (£) (NOV) | -3000 | -3644 | Low |
| 11:00 | EUR | German Industrial Production (MoM) (NOV) | 1.0% | -2.6% | Medium |
| 11:00 | EUR | German Industrial Production (YoY) (NOV) | -2.9% | -3.7% | Medium |
Critical Levels
| CCY | SUPPORT | RESISTANCE |
| EURUSD | 1.3045 | 1.3128 |
| GBPUSD | 1.5971 | 1.6113 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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