Asian Session – Euro trades cautiously ahead of ECB, yen retreats on positive risk sentiment
March 6, 2014 7:32 am
The main theme dominating markets was the anticipation of the European Central Bank meeting later in the day as there has been a lot of debate whether the ECB will provide stimulus and what kind of stimulus or if it will choose to wait following the uptick in February inflation last Friday. One possible measure was to stop the sterilization of the Securities Markets Program or in other words to stop the withdrawal of liquidity that matches the amount it spent on buying bonds of troubled peripheral countries in previous years – around 180 billion euros.
The euro is not far from the high of its recent range and ECB action or inaction is likely to push the currency around as was the experience in previous ECB meetings. Euro / dollar was little changed at 1.3730 in Asian trading.
Weak data released in the United States the previous day, such as a bad miss in the ISM non-manufacturing PMI survey and a weaker-than-expected ADP payroll number did not affect the dollar as much. Weakness in the data was again attributed to bad weather.
The yen was the biggest loser as both the dollar and the euro climbed against it to trade at 102.66 and 140.94 respectively. Asian stocks were trading higher. Risk sentiment appears to be turning more positive as markets feel that the Ukraine crisis is under control now that a diplomatic solution to the problem is being sought for. However, according to press reports, the latest talks between the Russian Foreign Minister and the US Secretary of State have made little progress and the situation on the ground remains tense.
The Australian dollar put in a strong performance, rising above 90 cents against the US dollar at 0.9017 following better-than-expected economic numbers such as trade balance for January and retail sales for the same month.
Looking ahead for the remainder of the day, European Central Bank and Bank of England meetings will be key events for the euro and sterling, while later on in the day US factory orders for January will be announced.
The main theme dominating markets was the anticipation of the European Central Bank meeting later in the day as there has been a lot of debate whether the ECB will provide stimulus and what kind of stimulus or if it will choose to wait following the uptick in February inflation last Friday. One possible measure was to stop the sterilization of the Securities Markets Program or in other words to stop the withdrawal of liquidity that matches the amount it spent on buying bonds of troubled peripheral countries in previous years – around 180 billion euros.
The euro is not far from the high of its recent range and ECB action or inaction is likely to push the currency around as was the experience in previous ECB meetings. Euro / dollar was little changed at 1.3730 in Asian trading.
Weak data released in the United States the previous day, such as a bad miss in the ISM non-manufacturing PMI survey and a weaker-than-expected ADP payroll number did not affect the dollar as much. Weakness in the data was again attributed to bad weather.
The yen was the biggest loser as both the dollar and the euro climbed against it to trade at 102.66 and 140.94 respectively. Asian stocks were trading higher. Risk sentiment appears to be turning more positive as markets feel that the Ukraine crisis is under control now that a diplomatic solution to the problem is being sought for. However, according to press reports, the latest talks between the Russian Foreign Minister and the US Secretary of State have made little progress and the situation on the ground remains tense.
The Australian dollar put in a strong performance, rising above 90 cents against the US dollar at 0.9017 following better-than-expected economic numbers such as trade balance for January and retail sales for the same month.
Looking ahead for the remainder of the day, European Central Bank and Bank of England meetings will be key events for the euro and sterling, while later on in the day US factory orders for January will be announced.
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