Aussie firmer, but Europe quiet FX markets were quiet yesterday as US investors cautiously returned following the extended Independence Day weekend. Trading was relatively featureless although the US dollar gave back some of last week’s gains. The greenback had rallied after a strong US Non-Farm Payroll number, together with weaker-than-expected German Factory Orders and Industrial Production data. In addition, European Central Bank (ECB) president Mario Draghi said the ECB was prepared to undertake a full-scale asset purchase programme should there be a down-turn in Euro zone inflation expectations. Cable has pulled back from the near-five year highs that it made last week. It is far too early to say if this will prove to be a top for the GBPUSD, but technically sterling is ripe for some profit-taking, or a period of consolidation at the very least. However, there is still a strong argument for being bullish of the British pound given the continuous flow of better-than-expected UK economic data. This has raised the probability that the Bank of England will be the first major developed-world central bank to raise interest rates. This belief should help support the British pound. But even if there was a significant bout of profit-taking, the area around 1.7000 for the GBPUSD should offer decent support. Overnight, Australia’s NAB Business Confidence index came out at +8 against the prior month’s reading of +7. The news has helped to lift the Aussie dollar this morning. Today’s significant data releases include UK Manufacturing and Industrial Production, and US JOLTS Job Openings. ECOFIN meetings are being held in Brussels and FOMC-voting member Narayana Kocherlakota will speak later this evening.
Posted on: Tue, 08 Jul 2014 06:50:41 +0000
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