With Japan out on the Vernal Equinox national holiday the beginning of the week in Asia was as dull as last week, with the dollar remaining firm and USD/JPY remaining stagnant. After Friday’s surprise rate hike by India, as well as continued fears over the stability of Greece and the Euro Zone as a whole, the EUR/USD dropped a big figure to levels near 1.3500 as traders scampered for security in the Dollar and Yen. Friday’s rate hike by India helped diminish risk appetite as traders felt that it was a signal that many stimulus programs would soon be repealed, thus causing global growth to suffer. Over in the Euro Zone, Greece continued to proclaim its woes as the rest of the European Union seemed ambivalent. A meeting of Euro Zone leaders will be held from March 25th – 26th, with Greece keeping its fingers crossed that the outcome will include some sort of concise plan of action to be used if needed.
The EUR/USD remained just off of three week lows of 1.3502 today as it moved between a 1.3506 and 1.3536 range for the day. The GBP/USD saw more dynamic moves as it dropped from 1.5023 to lows near 1.4937 in what were the biggest moves of the day. In Australia, the AUD/USD bounced between 0.9125 and 0.9155 in a session that had no meaningful data releases on the table. While the yen crosses remained range bound near lows, the USD/JPY pair traded in just a 15 pip range in the liquidity starved market.
Up ahead we have some important speakers on deck including the BoE’s Governor King, the ECB’s Trichet, and the US Treasury Secretary Geithner. As well, the passage of a publicly maligned health care reform bill in the US may spark some repercussions once New York’s trade day commences.