Dynamics
U.S. dollar traded in narrow ranges against most other major currencies. When the pair EUR /USD has remained below the 1.4200, the pair GBP /USD rose slightly above 1.6200, and the pair USD /CHF was trading around 1.0400. Japanese yen consolidated against other currencies. When the pair USD /JPY has remained in the area of 90.00, and the pair EUR /JPY was trading below the 128.00. Commodity currencies were traded unchanged against the U.S. dollar. Thus, the pair AUD /USD has remained below the 0.9100, the pair NZD /USD consolidated on the way to 0.7100, and the pair USD /CAD traded at 1.0600 to the approach.
Causes
investors were not inclined to open large positions ahead of the release of a number of new economic data and the meeting of the U.S. central bank. Small amount of new data, presented yesterday, also boosted activity. Published in the U.S. sales figures on the secondary housing market in December fell more steeply than expected, which, however, had no noticeable effect on the market.
This morning the Bank of Japan at the next meeting left key rates unchanged and does not have an extension or increase of emergency programs for lending and purchases of Japanese government bonds. This allowed the Japanese yen strengthened against the U.S. dollar and other currencies, because of high demand, as an asset of refuge.
What to expect?
In general, market participants focused on the outcome of the next meeting of the Fed, as well as the publication of data on U.S. GDP in the IV quarter. These events are likely to have greatest impact on the market, whereas before that major changes are unlikely, despite the fact that the U.S. seeks to continue its growth.
At the same time, today”s publication of macroeconomic data from the U.S. and other countries could exert some influence on the relevant currency. In particular, the most visible today become Germany”s IFO index of publication, as well as a preliminary assessment of UK GDP in the IV quarter. From that, how many will be strong or weak, these indicators will depend on the situation of the euro and pound in the short term.
In the United States today will be presented to the indices of consumer confidence and business activity according to the FRB Richmond. The growth of these indicators can provide U.S. dollar short-term support.
Why worry?
In anticipation of the Fed meeting, likely very volatile multidirectional changes in the position of the American currency.
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