Currencies Consolidate Ahead of Central Bank Meetings

We saw the currencies consolidate yesterday at recent low dollar levels as the market took the chance to have a breather ahead of two central bank meetings and some good tier 1 data today. The dollar is still very much on the back foot with the dollar index languishing around 94.80 having found some support at 94.50 after the recent moves.

The commodity currencies are still looking very healthy with Aud and Nzd trading near their yearly highs but Cad is probably still the stand out as strong manufacturing sales data helped to keep it bid in last nights session.

Looking ahead to today and there is plenty of potential for some big moves in the sessions ahead, first up in Asia we have the Aussie employment data with a +14k number expected keeping the unemployment rate at 5.6%, this is followed later in the session by the BOJ which of course is not expected to change rates but the statement and report will be closely watched by traders, especially in light of other central banks recent change of tone.

Into the London session and we have UK Retail Sales serving up as an appetizer for the main dish of the day which is of course the ECB Meeting, with the market looking for some more indication of the speed of any move from the central bank. As we have seen recently this has the potential to move the single currency a big figure or two very swiftly.

The NY session is a bit more muted with just the weekly unemployment claims due out along with the Philly Fed Manufacturing Index.

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