With little to guide the balance of risk overnight currency markets stayed quite subdued with the bias leaning towards the Greenback. There was no top tier economic data for markets to digest even with yesterday’s solid monthly Home Loans rise in Australia did little to influence the Aussie which continued to ease to lows of 93.44 US cents. The US dollar also manage to push as high 99.298 Yen early in the US session but even with tapering expectation blamed for market movements it really was a ‘nothing’ couple of sessions with the majority of crosses staying in 30-40 pip ranges.
The Euro was the only bright light through the night in terms of volatility and genuine trade movement. It wasn’t data driven but the Euro received support the moment markets awoke in that region with support lasting all the way until this morning and the Euro improved by 50 pips to be as high as 1.3416 USD and 83.95 Pence. These highs were only 20 pips away from where the Euro traded pre ECB decision with trade flattening on through the US Veterans day holiday.
Trading activity was likely to be a bit more pronounced today's with Bank holidays finished and economic data picking up. Locally we have NAB Business Confidence which has really bounced post-election and markets didn't react to kindly as it went back to the negative with the Aussie slipping post release. Tonight we have UK CPI, which is expected to fall which should make the Bank of England policy decisions easier going forward as it sits more closely to their target range.
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
