The USD and other major currencies continued to trade under the shadows of central bank mandates on Tuesday. The Federal Reserve released its FOMC Statement which once again admitted that the U.S. economy is experiencing a less than stellar recovery and that quantitative easing remains a possibility in the near future. The USD weakened against the EUR and GBP as trading came to an end yesterday and the JPY also got stronger. Divergent markets have been a key ingredient within the currencies the past two weeks as the major currencies have been under the auspices of government interactions, and currencies such as the AUD and CAD have experienced strength due to the heights Gold has reached.
Today the U.S. will be fairly quiet with economic reports except for a Crude Oil Inventories fact sheet. Europe will publish Industrial New Orders today and minus -1.2% is the forecasted result. The U.K. will publish their MPC Meeting Minutes from the last BoE monetary policy session. Like the U.S. there are plenty of ‘rumors’ surrounding the level of debate in the Bank of England and it will be of interest to see if any rancor is recorded for public consumption. The debates surrounding austerity and growth and how the two can be achieved at the same time have become a match box of contention.
There will be plenty of data for investors tomorrow globally for investors to chew on with Existing Home Sales and weekly Unemployment Claims coming from the U.S., along with PMI Flash reports from Germany and France. The USD has essentially traded weaker the past two weeks because of rumors surrounding the Fed’s intention of creating further stimulus for the American economy. Although it was not delivered last night by the FOMC, the Federal Reserve went out of their way to call attention to quantitative easing once again.
Commodity prices, particularly the precious metals have continued to show that investors and traders alike remain speculators and caught in the crosshairs of a broad market which is exhibiting signs of risk appetite but in a nervous fashion. While Gold has been strong the reasons for its rise are a complicated mix of speculation and at the same time safe haven mantras being expressed. The AUD has found a solid push in value under the commodity price climbs and until Gold shows weakness, the AUD may continue to produce a swagger.
Written by bforex.com
