The Euro continued to skim above the 1.1930 level today in Asia, after a move to 1.1975 lost steam early in the session with a lack of the usual volatility keeping the mood subdued. After Monday’s quick drop to four year lows near 1.1875, the EUR/USD has not ventured below the 1.1900 big figure as the pair continues to consolidate prior to Thursday’s ECB meeting and rate decision. Many traders are expecting the ECB to offer some type of clue as to what their next steps will be to sure up confidence in the single European currency. No one expects a rate change from the current 1.00% level in the EU, but the ECB may want to act in a dramatic fashion in order to help the crippled Euro as well as investor assurance in the currency.
EUR/CHF remained focused near 1.3780 after a supposed intervention by the SNB earlier in New York sent the pair to 1.3890 momentarily before a subsequent drop back to current levels. The firepower just wasn’t there for the Swiss Bank against the heavy Euro. Yen crosses softened as risk subsided with Asian equity prices. While the moves were small in the crosses, the USD/JPY moves were even tighter at a 35 pip range. The yen was unfazed by solid machinery orders which came in at +4.0% vs. +1.2% forecasts.
Although markets took a well deserved break again in Asia, the data over the next few days should change that dramatically. First thing in the morning tomorrow in Asia we have the RBNZ rate decision followed by employment data out of Australia and finished up with Trade Balance out of China. As well, tomorrow’s London session will continue the action with the cash rate announcements of both the BOE and the ECB swiftly followed by US Trade Balance….