Currency markets were range trading overnight with little to shape market sentiment. The Euro recovered from earlier losses to end the session only a few pips lower from Fridays close and the pound dropped slightly on the back of profit taking from recent gains. The only piece of substantial data out last night was US existing Home sales which can in at 5.29 million, just shy of expectations. The figure did not shape any changes to the expected out come from the FOMC meeting so as a result we did not see any volatility after the release.
The main movements came from the more exotic pairs such as the Mexican Peso. Retail sales figures out of Mexico came in at negative 2.2% for the year adding further pressure on their central bank to cut interest rates. As a result of this negative print we saw the Peso drop to almost 13USD from 12.85 earlier on Monday.
Markets will once again likely to be range bound with traders likely to be buying on dips against the greenback. Non-farm payrolls may be able to change this trend however expectations are relatively high with 182K positions looking to be added to the US economy. The jobs market out of the US has been sluggish recently with Augusts release coming in just over 100K jobs after being negatively revised. Should we see anything lower than 170K positions it will only cement the outcome of the next meeting from the FOMC.
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
