The Euro continued on from yesterday’s gains in trading overnight and it managed to trade as high as 1.3645 USD early in the US session. The gains were largely driven but strong economic data as Services PMI from Italy and Europe as a whole sat well within an expansionary phase. That data was followed by retail sales which surged 0.7% month and month, with last month also being positively revised. With many analysts in the last few days questioning whether the Pound was being overbought, markets responded in kind overnight. Solid services PMI data had pushed the Pound to 1.6234 USD early in the European session before the steady selling took place with 80 pips stripped the value compared to the Greenback.
The Australian dollar traded in very tight rage overnight with risk currencies still steady amongst the dramas over the US funding impasse and pending debt ceiling deadline. The Australian dollar has jumped above 94 US cents for the fourth time in the last eight hours. An underperformance of ISM Non-Manufacturing PMI data also weighed on the US dollar but we did see another encouraging weekly unemployment claims which stuck close to the 300,000 mark.
It’s going to be a quiet Friday with no Non-farm payrolls to build towards which has been pushed back to at least the middle next week. The BOJ Press conference is up today but with economic data of late broadly in line with their targets its likely there will be no change to current policy. The likelihood is that unless there is some sort of traction in Washington it’s going to be a quiet finish to the week.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
