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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 traded broadly lower, down as much as 0.4% on average against major currencies as stocks pushed higher in Asian trading, weighing on demand for the safety-correlated greenback. Risk sentiment is likely to remain as the dominant catalyst driving currency markets in European hours.
Key Overnight Developments
• US Dollar Retreats as Australia Leads Stocks Higher
• Euro Rises, Pound Mixed to Start the Trading Week
Critical Levels
The Euro advanced in overnight trading, adding as much as 0.6% against the US Dollar. Although the British Pound managed to recover from losses early in the session on broad USD weakness, the UK unit failed to build meaningful momentum and remained confined to familiar ranges ahead of the opening bell in Europe.
Asia Session Highlights
With no significant data on the calendar, currency markets turned to risk trends to drive price action. The US Dollar traded broadly lower, down as much as -0.4% on average against major currencies as stocks pushed higher in Asian trading, weighing on demand for the safety-correlated greenback. The MSCI Asia Pacific regional benchmark index advanced 0.5%, with Australia leading the way as building materials maker James Hardie Industries said its full-year profit will be close to the top of the range of analysts’ forecasts at $115 million. The announcement pushed Australia’s S&P/ASX 200 equity index up as much as 0.8%. The markets’ response may have been amplified by thin liquidity, with Japanese exchanges closed for the Labor Thanksgiving holiday.
Euro Session: What to Expect
European Purchasing Manager Index figures are set to show broad improvement, with the pace of expansion in the region’s manufacturing and services sectors gaining speed in November. PMI readings have been steadily rebounding since March on the back of government stimulus efforts, a trend that has had ample opportunity to be priced into the exchange rate, so anything shy of a wind deviation from expectations is unlikely to produce a lasting impact on price action, although light volumes may amplify what would otherwise amount to small swings in prices (as was the case in Asian trading).
Rather, risk trends are likely to remain in focus. US equity index futures are trading up 0.4%, pointing to continued gains for risky assets and correlated currencies at the expense of the safety-linked US Dollar and Japanese Yen. There are no major earnings releases scheduled for European hours. October’s US Existing Home Sales may prove market-moving late into the session, with the markets still viewing the state of the world’s largest consumer market as a proxy for the health of the global economy at large.
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