Data Weighs On Forex Market While Commodity Currencies Bottom

Last night, the economic data agitated the currency market even though the final closes were nearing the opens.

The Eurozone CPI rose by only 0.3% in September – a fresh low since October 2009. The core CPI grew 0.7%, lower than the expected 0.9%. The data most likely will lead the ECB to introduce further stimulus policy. The next ECB meeting will be this Thursday, with the market expecting a scale of 400-500 billion Euro ABS purchasing program to be disclosed. The euro fell to a two-year low against the dollar after the release of its CPI, dropping as low as 0.6% to 1.3614.

Moving into the American trading hours, the Canadian GDP saw little change in July from the previous month, whilst the expectation was a 0.3% expansion. The Canadian Dollar lost 0.4% and the USDCAD climbed to a new recent high of 1.12.


On to the commodity currencies, the kiwi is still weak but the Aussie showed some unconfirmed sign of reversal in the 4-hour chart. The Aussie refused to refresh its lows and upwardly broke the steep downtrend from the 0.94 point. The RSI in the 4-hour chart also suggested a sign of a bottom. As previously mentioned, the year low of 0.8650 will be the target for the Aussie and may provide strong support to the currency. Traders now should seriously consider the possibility of a rebound.


The Asian stock markets finished with mixed results yesterday. The Shanghai Composite moved 0.26% up to 2364. The Nikkei Stock Average slumped 0.84%. The ASX 200 bounced 0.54% to 5293. In European stock markets, the UK FTSE was down 0.36%, the German DAX gained 0.55% and the French CAC Index surged 1.33%. U.S. stocks fell slightly. The S&P 500 lost 0.28% to 1972. The Dow edged down 0.17% to 17043, while the NASDAQ Composite Index dropped 0.28% to 4493.

On the data front, the Chinese Manufacturing PMI will be released soon at 11:00 AEST. Australia Retail Sales will soon follow half an hour later. The UK Manufacturing PMI will be at 18:30. At the beginning of US trading hours, US ADP Non-Farm Employment Change and ISM Manufacturing PMI should be closely watched.