As has been the pattern of late, currencies are well bid into the US session, with the exception of the Yen, which has extended setbacks against the USD. It is however quite unusual and potentially somewhat telling to see that the bid in currencies has not been led by the higher yielding antipodeans, but rather the Euro and Swissie, which both track higher by some 0.50% against the buck on the day.
As has been the pattern of late, currencies are well bid into the US session, with the exception of the Yen, which has extended setbacks against the USD. It is however quite unusual and potentially somewhat telling to see that the bid in currencies has not been led by the higher yielding antipodeans, but rather the Euro and Swissie, which both track higher by some 0.50% against the buck on the day. Market participants are now looking for a fresh Eur/Usd 2009 high towards 1.5200 on Thursday, but order boards show some good supply on approach to the next psychological barrier. Meanwhile, Usd/Chf seems to be very well supported below parity.
On the data front, Eurozone revised GDP came in as expected, while retail sales and PMI were slightly weaker. Meanwhile in the UK, PMI data was softer and helped to generate some fresh broad based Sterling offers. Also seen weighing on the Pound was the news that the Bank of England was considering corporate bond sales to boost market liquidity.
Looking ahead, all eyes turn to the ECB rate decision due at 12:45GMT. Although it is widely expected that the European Central Bank will remain on hold at 1.00%, market participants will be keenly focused on the Trichet press conference that follows, for insights into the future direction of monetary policy, including the much talked about exit strategy.
The North American calendar is all US data, with Non-farm productivity (8.5% expected), unit labor costs (-4.2% expected), initial jobless claims (480k expected), and continuing claims (5400k expected) all due out at 13:30GMT. ISM non-manufacturing (51.5 expected) then caps things off at 15:00GMT. US equity futures are pointing to a higher open, while commodities are also marginally bid. It is worth noting that at the time of print, oil was outpacing gold on the day, which could be a warning sign for some exhaustion and profit taking in the yellow metal.
