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Yesterday, was an interesting day.

At 1:30pm, weak China data; lower industrial production, poor retail sales and lower fixed investments, didn’t do much to the AUD, as I believe the AUD has already been taken down quite a fair bit.  Nonetheless, just based on flows into the US session, the AUD was about 50bps+ lower to 0.7564.

I must have been something that was said by Draghi at 4pm during his speech, because the EUR tanked from 1.0700 down to 1.0527 during NY midday session.  It has now settled at 1.0509.

I was focusing on the UK and manufacturing and industrial production at 5:30pm yesterday as it was a topic much talked about for the past two weeks leading up to it.  Therefore, I felt that if there is going to be any off data, there will be significant moves on the GBP.

At about 5:20pm when spot was trading at 1.5055, I decided to place a stop if bid/offer spread at 1.5080 and 1.5020.  As it turned out, the data came in very weak, in fact, in negative contraction.  However, the market didn’t really respond to it…………till the NY session.  At NY opening, the GBP was taken down severely.  At about midnight or midday session, the GBP was trading at 1.4937.

At that time, I decided to square off the trade for a trading profit of 83bps.  Not bad.

Yesterday’s trading was a classic case of if the market doesn’t respond during London session, it certainly will respond during the NY session.  As we all know, both the London and NY markets is where the bulk of the flows reside.

I am still interested in what Draghi said, because the EUR really collapsed.  Will find out and comment on it.  Looks like market sentiment, the media and flows are really going to push the EUR towards the parity level?!

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