After a rare reprieve for the embattled US Dollar was witnessed earlier in New York, Asian trading saw a notably quiet session with the greenback trying to cling to those gains. After the better than expected ISM non-manufacturing PMI release surprised to the upside, (54.3 vs. 53.2), the dollar firmed, squeezing out all of the short players on its ride higher. With an almost big figure drop under its belt heading into Asia, the EUR/USD churned between 1.3145 and 1.3145 just off of earlier lows at the 1.3130 level. GBP/USD followed the same template, trading just off of 1.5855 lows in a range of 1.5870 and 1.5910 for the session. The dollar firming also pulled the USD/JPY up from recent eight month lows near 85.30, keeping Finance Minister Noda from a fourth consecutive day of commenting on the unwanted strengthening of the yen.
Early session data out of New Zealand was not favorable to the county’s currency, as the unemployment rate came in at 6.8%, higher than the expected 6.3%, and the employment change dropped to -0.3% from a forecast of +0.5%. The NZD/USD in essence collapsed from 0.7350 to 0.7275 in a matter of minutes. The pair has not been able to break above the 0.7300 level since. Consequently, AUD/NZD hit almost three month highs to 1.2577 on the back of the weakened Kiwi dollar. Neighboring Australia saw its currency buck the trend against the firming us dollar as AUD/USD remained at elevated levels just off of 0.9185 highs due to the influence of higher commodity prices. Speaking of commodities, XAU/USD remained a few dollars off of earlier $1203.00 highs, as the tandem of oil products, BCO/USD and WTI/USD both remained just under the $82.00 per barrel mark.
It will be quiet on the data front ahead in London, at least for the first few hours until the release of both the BOE and ECB rate decisions at 11:00GMT and 11:30GMT respectively....Both central banks are expected to leave rates untouched, but as is usually the case in such instances, the following statements could provoke market volatility.