17 September, 2013
Currency markets are slowing down in anticipation of a major risk event of the year, which is the much anticipated Federal Open Market Committee announcement on Wednesday. Many investors are focusing on what the Fed will say and whether it will decide to taper stimulus and by what amount.
Any large reduction to the current $85 billion a month asset purchase program, say more than $10 billion, will move markets, but may minimal amount will unlikely disrupt markets. The dollar is being weighed down by this bond purchase program, so any signal the Fed will begin scaling back on this will help the dollar appreciate.
Today USDJPY was directionless between a range of 99.05 and 99.30 yen as investors prefer to wait on the sidelines before the FOMC meeting, since this pair will be the most affected by any Fed announcement.
In other news, the main economic data during the European session was the German ZEW index on investor confidence. The index hits its highest level since April 2010 showing that Europe’s largest economy has a brighter outlook its economy as well as for the overall Euro zone economy.
EURUSD rose to a session high of $1.336, gaining 0.2 percent from the session open of $1.3342.
Sterling was hurt by lower UK inflation data today, which raises the likelihood of interest rates remaining low.
GBPUSD fell to a session low of $1.5884 after hitting an early session high of $1.5935.
Coming up in the US session, data will be released on US inflation as well as on the US housing market.
The Asian session was calm as the economic calendar was light and most investors were positioning ahead of key risk events later this week, primarily the US nonfarm payrolls report on Friday...
The first full trading week of 2014 began today, with Japan opening for the first time after a two-week holiday...
The pair extended the positive trading, whereas it approached 61.8% correction at 1.3625
The dollar rose above 102.00 yen for the first time since May 29, while the euro flirted with the key $1.36 handle and hit a new four-year high within striking distance of 139.00 yen...
The best performing currency during Thursday’s Asian session was the Australian dollar which jumped against its US counterpart after strong Australian business spending data. Private Capital Expenditure increased by 3.6% quarter-on-quarter despite expectations for a decline by 1.1%...
The main currency of the day was the sterling which outperformed against the dollar and euro, as well as against the yen after being boosted by strong UK second quarter growth data...
The euro was stronger today particularly against the dollar and the pound. While there were no economic data releases today from the Eurozone to explain the move, there were some headline news which affected sterling and dollar...
The yen was supported by safe haven demand today after the release of a slightly dovish Bank of Japan policy meeting minutes. The minute from last weeks meeting showed some concern about Japans economic outlook and whether the central bank 2% inflation target could be met...
The dollar remains bullish against the yen, while the euro hit a new four-year high against the Japanese currency in todays Asian session...
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