Asian Session – Euro weakens ahead of ECB, aussie jumps on strong retail sales
February 6, 2014 7:53 am
Thursday is an event-filled day, with the Bank of England and European Central Bank policy decisions due in the afternoon. Ahead of these events the German factory orders numbers will be released, while later in the US session jobless claims will be in focus.
The euro slid 0.10% against the dollar during the Asian session to end at 1.3519 as investors are being cautious ahead of the ECB event.
Weighing on the euro recently is growing speculation that the ECB may take action to help fight off the threat of deflation, especially after last week’s soft Eurozone inflation data that were well below the Bank’s 2% target rate. Even if the ECB does not cut interest rates today, any dovish comments from ECB Chief Mario Draghi that would signal a cut at the next meeting in March will negatively impact the euro.
Against the yen, the euro slid 0.09% to 137.12 although the pair remained supported above the key 137.00 level and off an 11-week low of 136.24 hit earlier this week.
The dollar was little changed against the yen at 101.44, staying above Tuesday’s 11-week low of 100.74 yen.
Helping buoy the yen in the past two weeks is safe haven demand amidst a recent sell-off in emerging markets. Meanwhile mixed US data weighed on the dollar. Yesterday, January’s ADP jobs numbers disappointed as private employers added 175,000 jobs in January, the smallest gain since August. The US non-farm payrolls report on Friday will be closely watched. Meanwhile, US initial jobless claims later today will also be important for the dollar.
Sterling held steady against the dollar in Asia,, ending the session at 1.6311 with just a mere 0.02% gain. The pound managed to rebound after dropping following UK services PMI data on Wednesday. The Bank of England policy meeting will likely keep investors sidelined ahead of this event.
The Australian dollar was the best performer in the Asian session as it jumped to a near-1-month high of 0.8979, versus the open of 0.8908. The aussie gained 0.73% to 0.8969 as a result of strong Australian retail sales data released today. Any upbeat data adds to the view the Reserve Bank of Australia (RBA) will not likely cut interest rates soon.
Thursday is an event-filled day, with the Bank of England and European Central Bank policy decisions due in the afternoon. Ahead of these events the German factory orders numbers will be released, while later in the US session jobless claims will be in focus.
The euro slid 0.10% against the dollar during the Asian session to end at 1.3519 as investors are being cautious ahead of the ECB event.
Weighing on the euro recently is growing speculation that the ECB may take action to help fight off the threat of deflation, especially after last week’s soft Eurozone inflation data that were well below the Bank’s 2% target rate. Even if the ECB does not cut interest rates today, any dovish comments from ECB Chief Mario Draghi that would signal a cut at the next meeting in March will negatively impact the euro.
Against the yen, the euro slid 0.09% to 137.12 although the pair remained supported above the key 137.00 level and off an 11-week low of 136.24 hit earlier this week.
The dollar was little changed against the yen at 101.44, staying above Tuesday’s 11-week low of 100.74 yen.
Helping buoy the yen in the past two weeks is safe haven demand amidst a recent sell-off in emerging markets. Meanwhile mixed US data weighed on the dollar. Yesterday, January’s ADP jobs numbers disappointed as private employers added 175,000 jobs in January, the smallest gain since August. The US non-farm payrolls report on Friday will be closely watched. Meanwhile, US initial jobless claims later today will also be important for the dollar.
Sterling held steady against the dollar in Asia,, ending the session at 1.6311 with just a mere 0.02% gain. The pound managed to rebound after dropping following UK services PMI data on Wednesday. The Bank of England policy meeting will likely keep investors sidelined ahead of this event.
The Australian dollar was the best performer in the Asian session as it jumped to a near-1-month high of 0.8979, versus the open of 0.8908. The aussie gained 0.73% to 0.8969 as a result of strong Australian retail sales data released today. Any upbeat data adds to the view the Reserve Bank of Australia (RBA) will not likely cut interest rates soon.
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