Overall, the majors traded mostly side-ways during the European session on weak momentum. The only exceptions have been the euro and swissy, which declined against the dollar. Until now, the S&P futures has had limited influence over the currency market, but later in the day the two are likely to move together, as has been the case lately. 

The Euro (Eur/Usd) was sold during the overnight session, as the market expects the ECB to reduce interest rates by 25 basis points on Thursday and introduce a new quantitative easing measure, but rebounded as the European session progressed. On the daily chart, the euro is approaching the 200-day simple moving average for the first time since December.

The Euro-area PPI shows that the pace of inflation is dropping at a sustained pace. Producer prices fell 0.7% in March, following a 0.4% (revised) drop just one month prior. From one year earlier, the PPI came in at -3.1%, the lowest read since February 1987.

The Pound (Gbp/Usd) fell approximately 50 pips during Asian trading hours, but surged higher after the London open. The pair is currently trading just under the 1.5100 resistance area, breaking above the recent highs. If the pair manages to move higher, above the 1.5100 and hold on the day, it may have a clear ride towards 1.5500. 

The U.K. construction PMI increased more than expected for a second month in a row. April’s Construction PMI gained 7.2 points, to 38.1, one of the biggest month over month gains on record. In February the index hit an all-time low. 

The Aussie (Aud/Usd) traded in a 50-pip range during the overnight session, caught between the neutral pivot point (0.7375) and by the 0.7420 resistance area. During the early European session, the RBA kept the key interest rate on hold, while presenting an upbeat statement about the status of the economy. 

The Bank of Australia decided to keep rates on hold, after their last interest rate meeting held at the beginning of April where they reduced the interest rate by 25 basis points in an unexpected move. RBA Governor Stevens has stated that the world economy appears to still be very weak even though the credit markets have improved over the last few months

The Cad (Usd/Cad) again saw very weak momentum during the overnight session. Despite this, the cad was able to withstand the dollar strength, and declined only a limited number of pips. Recently, the cad has moved lower for five consecutive days, losing more than 450 pips. 

The Swissy (Usd/Chf) moved in-line with the euro during the Tuesday trading session, rising 95 pips. Additionally, the pair recovered most of the pips lost on Monday, during the overnight session. Heading into the U.S. session, the pair is struggling to hold on to the gains made since the start of the day. 
The Yen (Usd/Yen) declined during the early part of the overnight session, but recovered every pip lost after the London open. Interestingly enough, the pair moved in the opposite direction than the S&P futures this week, abating from the long-term relation between them.