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Forex pairs in this Article » GBP/USD, USD/JPY (London) - Broadly speaking, the dollar is a great deal firmer across the board following in from a poor performance in equities in Asia and the European session as well.

Tapering is still on the lips of market participants with speculation of timings being brought forward, and the fact that a third of participants (in a Bloomberg poll after the employment data) see a December start suggest that there is a risk of a market reaction next week when the FOMC meet on the 18th. Meanwhile, the G10’s have been consolidating for the most part in throughout NY. We have seen US data disappoint on the jobless claims count but improve on the consensus for the retail sales offering support to the greenback.

The Australian dollar has grounded with a low of 0.8916 after a sharp fall out of unwinding from the mid range of the 0.90 handle when Glenn Stevens surprised markets with his overall dovish tone overnight suggesting the economy would be doing better if the currency were trading closer to 0.8500.

Sterling lost grip of the 1.64 handle and recorded a low of 1.6321 while the pair has been gradually unwinding since Tuesday. Overall, markets are expecting Sterling to remain favoured with the twelve month inflationary forecasts and swap markets are beginning to price in the requirement to bring forward tightening.

The Canadian dollar has been in consolidation mode after reaching a high of 1.0645. Bank of Canada governor Stephen Poloz said in his speech today that he needs to keep interest rates at historically low levels to head off the risk of a deflationary trap that would have dire consequences for the Canadian economy.

The Yen has been a strong grind higher pushing through the 103 handle and reached a high of 103.45. This was completely reversing this weeks losses just shy of the 103.75 monthly high.

Main headlines on the session:

US equities close lower

GBP/USD hits daily low after US data

RBA's Glenn Stevens wants Australian dollar closer to 85 US cents
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