[ForexNews]

Global cyclical assets have continued their strong start to the year with SPX and oil touching new highs. Asian currencies in particular have been at the forefront of these moves. The key question for NJA FX is whether this is the start of a longer move or will run out of steam. The breadth and depth of the rally so far though suggest that it has been driven to some degree by the increased appetite to add risk back on early in the year, supported partly by the string of upside surprises in cyclical data generally across the globe. This also means that the moves that we have seen so far could be susceptible to near term shifts in global risk appetite, especially if unaccompanied by supporting domestic fundamentals. The upcoming payrolls report in particular may present a certain element of risk in positioning tactically for $/Asia lower at this point after the recent move. Central Bank tolerance of further currency appreciation is also important and there has been some reported intervention in recent trading.