The price action has been somewhat suspicious, particularly in the case of the Euro
, with investors seemingly pouring into the beleaguered currency
on the back of a very well received Greek bond auction
, while neglecting any of the negative fallout from a downgrade to Portugal
, weaker economic data,
and a request from Spain for the EU to extend the bank’s restructuring fund.
Nevertheless broader price action is also reflective of a Greenback that continues to fall out of favor on weaker growth prospects
, and a demand for higher yielding assets
as the much stronger earnings from Intel
after the bell on Tuesday could help to propel additional USD
declines as the net positive result is interpreted more as net positive for risk and thereby a net negative for the buck. On the data front, the key release in Asian trade
has come out of New Zealand, with retail sales
coming in weaker than expected. This has immediately put some pressure on Kiwi
, although a break back below 0.7075 will be required at a minimum to negate the recent bullish price action. Also out in Asia has been a slightly better than expected UK nationwide consumer confidence
print and a surging Australian consumer confidence
reading that have failed to materially factor into price action. Finally, the Bank of Japan
kicks off its monetary policy meeting.
Looking ahead to European trade, the UK claimant count (4.5% expected) and jobless claims change (-20.0k expected), and unemployment rate (7.9% expected) are due at 8:30GMT, followed by Eurozone CPI (0.0% expected) and industrial production (1.2% expected) at 9:00GMT. US equity futures have extended gains in Asian trade, while commodities trade relatively flat.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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