Certainly the risk of a hung parliament would not bode well for Aussie and the longer it takes to clear things up, the more at risk the currency will be. However, most traders feel confident that clarity will be offered shortly which in the end could give the Aussie a boost into European trade.
Meanwhile, the overall picture remains on the bearish side for currencies and bullish for the USD, with broader global macro concerns, and the technical outlook suggesting that the Greenback could be poised for more gains. Friday’s dovish comments from ECB Weber caught the markets off guard and helped to accelerate Euro declines to 5-week lows against the buck before finally finding some support in the mid-1.2600’s into the close.
Looking ahead, Swiss money supply is due at 7:00GMT followed by German PMI manufacturing (60.5 expected) and services (56.3 expected) at 7:30GMT. Eurozone PMI manufacturing (56.1 expected) and services (55.4 expected) are then out at 8:00GMT, with Eurozone consumer confidence (-14 expected) out later in the day at 14:00GMT.
Written by Joel Kruger and Jonathan Granby
If you wish to receive Joel’s reports in a more timely fashion, email jskruger@fxcm.com and you will be added to the distribution list.
If you wish to discuss this or any other topic feel free to visit our Forum Page.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
