FX News Today
European Fixed Income Outlook: Asian stock markets mostly higher. Japanese markets remained close for a holiday, but elsewhere technology companies led markets higher, after yesterday’s rally in the U.S.. U.S. and UK100 futures are also higher, suggesting an improvement in Europe, after GER30 and UK100 were weighed down by strong currencies yesterday. Sterling continues to advance and the EUR remains above 1.20 against the USD which is likely to limit gains, although the EUR has started to stabilise somewhat after five days of gains. ECB’s Nowotny warned of the risk of stock price bubbles, as U.S. markets are already overheating and suggested the end of net asset purchases are in sight, thus adding to signs that the current QE program will be the last. Today’s calendar focuses on German labour market data, which is likely to show another drop in official jobless numbers.
FX Action: AUDUSD and NZDUSD came under corrective pressure during the early phase of the Asia-Pacific session before finding a footing. AUDUSD logged a low of 0.7805 in Sydney dealings after shedding just over 30 pips, putting in some space from the 10-week high logged yesterday at 0.7844. A fresh broad-based bout of U.S. dollar weakness saw the pair tick back up, to the 0.7820 mark. Data and notably events have been a scarcity today, and trading has been on the thin side with a portion of local market participants still on vacation, enjoying the post-Christmas and new year summer down under, while Japan remains closed.
Charts of the Day
Main Macro Events Today
- UK Construction PMI – The construction PMI anticipated unchanged at 53.1 reading.
- German Unemployment – German Dec jobless numbers are seen falling a further -12K, leaving the jobless rate at a post-unification low of 5.6%.
- ISM Manufacturing PMI – The December manufacturing ISM is expected to slip to 58.0 from November’s 58.2.
- FOMC Meeting Minutes
Support and Resistance Levels
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