First it was the Hungary/IMF news
that should have marked a serious dent in demand for the Euro
, and then a Moody’s downgrade to Ireland
, followed by reports that German lender Hypo Real Estate
had failed the stress tests. After all was done, the Euro managed to close slightly higher on the day on Monday, and it now appears that there is very little to deter the currency from continuing on its intense recovery path. Other currencies were relatively unchanged, although we did manage to see relative weakness in both Sterling and Swissie
on cross related demand for Eur/Gbp
The key release in Tuesday trade thus far has undoubtedly been the RBA Minutes. However, the release has failed to materially impact price action after there were no surprises. The central bank seemed to try to play down the importance of the upcoming inflation data due next week saying the central bank will take all information into account. RBA Stevens expressed uncertainty over next year’s global prospects but remained optimistic over Australia’s economic conditions, his generally upbeat economic views imply the tightening bias is still intact.
Looking ahead, German producer prices (0.2% expected) are due at 6:00GMT followed by the Swiss trade balance at 6:15GMT. Attention then turns to the UK at 8:30GMT with the releases of bank mortgage approvals (52k expected), public finances (16.0B expected), public net borrowing (13.0B expected), and M4 money supply (-0.1% expected). More UK data follows at 10:00GMT in the form of CBI trends total orders (-24 expected) and CBI business optimism (22 expected). It is still quite early in Tuesday trade but US equity futures are pointing lower while commodities are flat.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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