DY: Currencies Back on the Bid in Choppy Month End Trade
Some second tier data releases in Europe have left the markets to trade off of broader global macro developments, with the USD back under pressure on Monday, as fears over contagion in Dubai begin to recede. Abu Dhabi has come to the rescue and will apparently provide the necessary aid to keep things afloat in the region.
Some second tier data releases in Europe have left the markets to trade off of broader global macro developments, with the USD back under pressure on Monday, as fears over contagion in Dubai begin to recede. Abu Dhabi has come to the rescue and will apparently provide the necessary aid to keep things afloat in the region. Meanwhile, the Yen continues to receive a lot of attention, with the single currency appreciation inspiring talk from the local government of a plan to take action in order to deal with the recent Yen appreciation. Some mid-European price action got traders talking after Usd/Jpy jumped some 50 points in a matter of minutes to raise questions of potential central bank intervention. However, many others attributed the price action to the news that strategy minister Kan confirmed that the government had agreed on measures to stop the Yen rise.
Relative Performance Versus USD on Monday (As of 10:10GMT) –
Bank of England mortgage approvals fell short of expectation and Eurozone flash CPI was firmer, but neither release proved to materially factor into price action. Elsewhere in the UK, the Engineering Employers Federation warned that insolvencies could rise sharply over the next 2 months unless sufficient financing became available. Many market participants are now looking ahead to the upcoming RBA meeting (25bps to 3.75% expected) with the rate decision of particular interest in light of the recent pullback in global equities and signs that a sustained global recovery will be hard to come by. Recent hawkish comments from RBA McKibbin have however helped to bolster the single currency to the top performing spot on the day, after saying that rates must be raised quickly in order to avoid fuelling asset bubbles.
Looking ahead, Canada GDP (0.4% expected) is due at 13:30GMT, followed by Chicago PMI (53.3 expected) at 14:45GMT. Dallas Fed manufacturing (0.0% expected) then caps things off at 15:30GMT. All currencies are higher against the buck on the day. US equity futures point to a lower open, while commodities are mixed with oil higher and gold lower.
