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- Feb, 09 Euro Higher on Greek Bailout Hopes but Markets Skeptical on Spain, Portugal
- Feb, 08 US Dollar, Japanese Yen May Extend Gains as G7 Disappoints on Greece Bailout
- Feb, 05 Dollar Hits Five-Month High on Risk Aversion, Euro Spikes Up Against Swiss Franc
- Feb, 04 British Pound Volatility Ahead as Bank of England Updates Monetary Policy
- Feb, 03 US Dollar, Japanese Yen May Decline on Rebound in Risk Appetite
- Feb, 02 Australian Dollar Tumbles as RBA Unexpectedly Holds Interest Rates at 3.75%
- Feb, 01 Currency Traders Boost Bets on Australian Rate Hike as House Prices Outperform
- Jan, 29 Currency Markets Locked in Risk-Driven Trade, Looking Ahead to US GDP
- Jan, 28 US Dollar May Decline as Stock Index Futures Point to Recovering Risk Appetite
- Jan, 27 Currency Markets to Look Past German Inflation Data, Focus on Risk Sentiment
- Jan, 26 US Dollar, Japanese Yen Gain on Risk Aversion as China Hikes Reserve Ratios
- Jan, 25 US Dollar, Japanese Yen Decline as Risk Appetite Recovers on Bernanke Confirmation
- Jan, 22 British Pound May Extend Rebound as UK Retail Sales Rise Most in Eight Months
- Jan, 21 US Dollar May Gain as China’s GDP, Inflation Figures Stoke Lending Cutback Fears
- Jan, 20 British Pound Volatility Ahead on Bank of England Minutes, Unemployment Data
- Jan, 19 Euro, British Pound May Continue to Diverge on German ZEW, UK Inflation Data
- Jan, 18 US Dollar, Japanese Yen May Decline as Risky Assets Rebound in European Trading
- Jan, 15 Euro Leads Most Currencies Lower Against US Dollar on Merkel Resignation Rumor
- Jan, 14 Euro Takes Center Stage as European Central Bank Announces Interest Rates
- Jan, 13 US Dollar May Gain as Currency Markets Turn to Risk Trends for Direction Cues
The US Dollar consolidated in overnight trading after surging in New York hours as stocks tumbled, boosting demand for the safety-correlated currency. Australian Business Confidence surged to the highest in 15 years in the third quarter according to the National Australia Bank. Risk sentiment is set to continue guiding markets in European trading.
Key Overnight Developments
• Australian Business Confidence Surged to Highest in 15 Years, Says NAB
• US Dollar Consolidates Despite Stock Losses Across Asian Exchanges
Critical Levels
The Euro consolidated in a narrow range in overnight trading, trading sideways in a 40-pip band above 1.4850. The British Pound followed suit, oscillating around the 1.63 figure.
Asia Session Highlights
Australian Business Confidence surged to the highest in 15 years in the third quarter according to the National Australia Bank (NAB), with measures of trading conditions profitability, and orders all pushing higher. Respondents polled for the survey also said conditions would continue to improve in the final three months of the year, boosting expectations that the Reserve Bank of Australia will continue to scale back monetary stimulus. Indeed, a Credit Suisse gauge of the markets’ priced-in interest rate expectations shows traders are betting the RBA will raise borrowing costs by at least 25 basis points when policymakers meet on November 2nd and over 200 basis points in the coming year.
The US Dollar consolidated in overnight trading after surging in New York hours as stocks tumbled, boosting demand for the safety-correlated currency. Traders had their pick of bearish catalysts as US lawmakers considered withdrawing a tax credit for homebuyers, commodities declined, FDIC chief Sheila Bair said banks continued to face “serious challenges”, and news emerged that Bank of America may have to sell shares to pay back its government bailout. Asian equities followed Wall St lower, with the MSCI Asian Pacific Index down 1.5%, but the underlying story looks to have already been priced into the exchange rate.
Euro Session: What to Expect
The economic calendar is thin on significant event risk in European hours. Switzerland’s UBS Consumption Indicator may extend losses in September after hitting a 5-year low in the previous month as unemployment climbed to 3.9%, the highest since January 2006. A bit of an upward correction is possible however considering consumer prices continued to fall, boosting domestic purchasing power, while a jump in new car registrations pointed to a marginal rebound in demand for durable goods.
On balance, broad trends in risk sentiment are likely to remain the dominant factor guiding currency markets. Traders will be paying close attention to third-quarter earnings reports from UK oil giant BP Plc as well as German drug-maker Bayer AG and luxury car manufacturer Daimler AG. US Consumer Confidence is also due late into the session and may prove broadly market-moving as investors continue looking to see the health of the world’s largest economy as a proxy for the global recovery at large.
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