Thursday’s trading continued to mirror the fact that most investors remain quite cautious within the broad markets. The currencies largely turned in a day of consolidated trading, global bourses hovered around known values, and commodities were lackluster. The surge in stability the past couple of days has given traders an opportunity to test ranges and momentum. The USD finished in much the same place it started against the EUR and GBP. The weekly Unemployment Claims numbers were unable to provide any surprises finishing up only slightly better than estimated and to balance things off (and again highlight why sentiment is so cautious) the previous week’s numbers were revised slightly downward – in essence giving a mixed result.
Today the U.S. will release Consumer Sentiment numbers from the University of Michigan. However the Preliminary number may not be enough to shift sentiment and investors may remain on the fence going into the weekend. The big picture is being dominated by the policies of the Federal Reserve and the European officials who are confronting their collective economic battles.
The USD and EUR will be an interesting pair to watch going into the weekend as both currencies provide traders a looking glass into the delicate balancing act the broad markets are experiencing currently. Cautious trading has been prevalent this week and both currencies continue to have many tough questions that they will have to answer in the short term and long term.
The Bank of England’s MPC monetary policy meeting yesterday provided another dose of tedium as it produced no changes and it was rumored that the MPC remains deeply divided about how to battle a struggling economy. The GBP like its counterparts traded in a quiet manner on Thursday and going into today will likely remain under a EUR centric banner.
Both the JPY and AUD also traded in tight ranges. The one lynchpin in the Asian marketplace that remains a possible wildcard is China and the manner in which they will try to extinguish domestic inflation. The interest rates among the banking sector of China are being watched carefully. Gold found itself within a ten dollar range on Thursday as it bounced between 1392.00 and 1383.00 USD for most of the day. The precious metal remains a key barometer to overall global market sentiment taking into account many investors are openly questioning the decisions of many central banks and their respective monetary policies.
Written by bforex.com
