The US Dollar dropped slightly yesterday as equity markets began to slow the pace of their recovery. Erasing part of Tuesday's gains, the EUR/USD retraced itself back towards 1.4300 at the opening of US markets as stocks slowly recovered, and the EUR followed suit against the greenback. Similar behavior was experienced against the British Pound as well, with a price reaching towards 1.6300 as of yesterday's late trading hours.
Economic recovery does not appear to be improving at the speed many investors were hoping for, and currencies appear to be tracing the movement of stocks as a result. While recovery floats between positive and negative economic data, risk appetite may be suffering as a result; hence the surge in the value of the JPY. One thing is certain, the economic news expected for today and tomorrow will no doubt generate an intense level of trading volume and volatility as investors try to price in the new growth forecasts for Europe and unemployment levels for the United States.
For today, traders need to be watching 3 currencies: the AUD, EUR, and USD. Australia released its trade balance figures this morning, which showed a deeper contraction than was expected, putting downward pressure on the Aussie. The European Central Bank will release its decision on short-term interest rates, which always creates volatility. Also, the US is going to give a glimpse into tomorrow's NFP report with today's Unemployment Claims figures. These will be the more exciting news days for trading that an investor can get. Make sure you're in the market today!