We saw a continuation of the dollars recovery throughout the trading day yesterday despite a dramatic drop in the UsdJpy following the BOJ’s announcement that it was cutting it’s purchasing of long dated bonds. Although the decrease is not a huge amount the move may have been exacerbated as the market takes this as the first signs of normalisation from the central bank. The Euro continued its move back from recent highs and once again this helped the dollar index to make fresh highs on the year above 92.60.
It was a relatively quiet day in the rest of the majors with little in the way of fundamental data releases to stimulate hard moves and we saw a general depreciation against the dollar with the UsdCad notably filling in the gap from it’s drop on Friday after the US Non Farms and Canadian employment numbers, this despite Oil once again making more new highs.
Looking ahead to today’s trading and the main focus for traders in the Asian session will the CPI and PPI data due out of China, any large deviation from market expectations of 1.9% and 4.8% respectively should see some good moves in the Cny and to a lesser extent the Aussie and Kiwi. Into the London session and the main release due out is the Manufacturing Production numbers from the UK with expectation of a 0.3% print. Cable has been relatively well behaved for the last few sessions, so traders will be closely watching that release to see if it becomes a catalyst for fresh moves. It’s quiet on the data release front into the New York session with only the US Crude Oil Inventories due in terms of tier 1 data.
Once again we expect to see the majors continue to trade in line with current sentiment whilst trading well within recent ranges. However, as always traders will be keeping a close eye on the news wires for anything fresh on the geopolitical landscape.
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