We’ve seen the currencies consolidate in recent ranges over the last few sessions as they have digested the impact of 4 central bank rate announcements and some significant tier 1 data releases. All the central banks have stuck pretty much to their scripts with no surprises coming and if anything we’ve just seen the market come away a bit disappointed that they haven’t been more bullish, probably mostly with the Fed and the BOE.
First up yesterday we had stronger than expected Australian jobs data which kept the Aussie bid for the rest of the day, both against the greenback and on the crosses. Into the London session and we had a trifecta of central bank announcements with the SNB, BOE and ECB all making announcements, we did see a bit of volatility across their respective currencies but there was nothing earth shattering and probably the best take from the day was the raised inflation and growth expectations from the ECB and the SNB. In addition to the scheduled meeting we also heard from the Bank of Canada’s Poloz in a speech at the Canadian Club in Toronto and his more hawkish comments probably resulted in the biggest move of the day as the Loonie dropped over a big figure from 1.2840 to 1.2720.
The other main theme from the days trading was the potential road blocks cropping up for the GOP’s tax reform bill, two key Republican senators are looking for changes on the child tax credits before they back the bill and this led to a drop in the major stock indices which translated through to a decent hit on the UsdJpy and other risk currencies. This, despite stronger than expected Retail Sales numbers in the states. Traders will continue to watch this space closely today and will trade it accordingly with any progress leading to stock market appreciation and the correlating affect across the currencies.
It’s very quiet on the fundamental data front today so expect the markets to remain range bound and traders to be watching the news wires for any fresh developments on the current themes.
Good Luck trading today! If you have any questions or queries, please contact the team at firstname.lastname@example.org
Click here to see our Daily Market Update webcast for a more in-depth look at the day ahead.
The Rakuten Securities Australia City Challenge:
Each day our daily FX Insight comes out with a different city featured in the title picture. We are offering 25 Aud each day for the first FX Insight reader that contacts us at email@example.com with the correct identity of that day’s city. This amount will be added to the winners trading account, if you don’t have a trading account one of our friendly staff will, of course, be happy to assist you in setting one up!
Thursday’s City: Saint Petersburg, Russia
RSA’s Twitter: https://twitter.com/RakutenSecAU