By Islam Towhidul

Chinese trade balance and data fell way below the expectations which forced Asian currencies such as AUD and NZD to tumble however the yen found strength across the board on Tuesday, hitting a two-year high against the euro, after an economic adviser to Japan’s Prime Minister Shinzo Abe indicated that the currency might have fallen too far and needed to retrace some of its losses.

Koichi Hamada said on Monday that the yen’s level of around 120 per dollar was very weak and that 105 yen to the dollar would be more appropriate thus fueling speculation that BOJ is uncomfortable with the rapid weakness of the yen. This morning the Chinese GDP fell below expectation thus reinforcing the sentiment of a slowdown in China which will have concurrent effect on AUD and NZD.

British consumer price inflation held steady at a record-low zero percent in March, uncertainty will most likely start affecting the currency as we get closer to the May 7th’s election. The euro industrial production came out as 1.1% vs exp 0.3%, coupled with the US retail sales and PPI coming in as weaker than expected allowed the euro dollar to rise to the price of 0.0700, all eyes now on the ECB conference where Draghi expected to continue his monetary policy.