Overnight Asia/Europe

• Quiet two-way action the rule

• Most pairs inside range with minor stops helping trade

• ECB cuts rates as expected

Today's Economic Reports

All times EASTERN (-5 GMT)

• 8:30am USD PPI m/m

• 8:30am USD Unemployment Claims

• 8:30am USD Core PPI m/m

• 8:30am USD Empire State Manufacturing Index

• 10:00am USD Philly Fed Manufacturing Index

• 10:30am USD Natural Gas Storage

Looking Ahead to Friday

All times EASTERN (-5 GMT)

• 8:30am USD Core CPI m/m

• 8:30am USD CPI m/m

• 9:00am USD TIC Long-Term Purchases

• 9:15am USD Capacity Utilization Rate

• 9:15am USD Industrial Production m/m

• 9:55am USD Prelim UoM Consumer Sentiment

• 9:55am USD Prelim UoM Inflation Expectations


The USD is quiet this morning after a very subdued overnight session. Traders note that action was light across all pairs with only minor interest on either side. Some stops were seen in EURO and GBP as a minor rally in both pairs pressed back to the area of overnight highs but for the most part the action was in the EURO-Sterling cross and that was also in a tight range. GBP held tech support at 1.4555 low prints with upside limited to a high print at 1.4664 making a tight inside range day in GBP. No real action was seen as traders remained sidelined ahead of both US data today and the rate announcement by the ECB due out shortly. EURO was also confined to a tight range as traders reported only a Dutch name on the bid; high print sat 1.3235 with lows at 1.3134 ahead of the ECB news. Traders are expecting a 50 BP cut or more with some calling for a full 100 BP move. The rate announcement will likely not be as closely watched as the accompanying statement and press conference which always seems to produce more volatility from the pairs. USD/CHF held to established inside ranges as well; high prints at 1.1229 and lows at 1.1135 making for a quiet two-way overnight session. Analysts suggest the rate is over-bought and due for a correction lower with large stops said to be resting in the 1.1100 and 1.1080 areas. USD/CAD continues to hold firm with a high print at 1.2508 finding light stops above yesterday's highs but volumes were light as well; lows at 1.2411 are still above critical support around 1.2380 area suggesting some additional follow-on buying was seen in light trade. Traders note that the rate was the surprise mover yesterday and likely overshot to the upside. USD/JPY made for another minor low dropping through stops said to be under the 88.50 area for a low print at 88.46 before recovering back above the 89.00 handle. Traders note that the follow-on weakness in equities overnight might have added weight but the rate is likely oversold and due for a short-covering rally anytime. Today's ECB action might spillover into the other pairs so watch USD/JPY for a solid close above the 90.00 area today as traders square books. Look for the USD to whipsaw today as the news will not be friendly from the US today; the USD is up against highs and likely to retreat during the day after the initial volatility around the ECB announcement and the early US data.