The European session was yet again where we saw the risk on trading take place and this time there was no respite for the Greenback through the US session. The Australian dollar was able to trade up to 94.46 US cents early in the session and held within 25 pips of this mark through to this morning. The US dollar did benefit for the sentiment against the Yen in the risk on play and was back in the 100 Yen range where it still sits after New York close. Speeches from Fed members Evans and Dudley failed to trigger any tapering lead moves on the Us dollar later in the night.
Four straight months of improving economic sentiment in Germany helped the Euro test fortnightly resistance of 1.3548 USD before is eased back just below that parallel. The confidence in the Euro was compounded by comments from the European Central Bank Executive Board member Joerg Asmussen “While I’d be very careful with such an instrument” as negative interest rates. His comments helped calm traders how have been worried that this was a likely option to be used to combat low inflation in the region. The Euro was up 100 pips versus the Yen to be at 135.713 and is sitting at 4+ year highs, with next key long term resistance just above 139 Yen.
Our local session is all about comments, with firstly Fed Chairman Bernanke speaking shortly and that is followed by RBA Assist Governor Debelle’s speech in Sydney. With the talk finished later tonight we have CPI from the States and although it’s performed very consistent in regard to market estimates it will still be the major driver for currency trade.
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
