EUR/USD continued its downtrend hedging to 1.3348 down by 15 points. The euro declined around 0.3 percent yesterday as Germany’s central bank said that the euro zone economy is expected to grow more slowly than initially expected during the rest of this year as conflicts in Ukraine and elsewhere weigh on business confidence. However, easing of tensions after Russia and Ukraine met for talk’s along with upbeat market sentiments restricted sharp fall in the currency.
GBP/USD fell by 79 points after the release of inflation data surprised the markets. The pound is exchanging at 1.6649. The British pound rose against the U.S. dollar on Monday after the Bank of England chief signaled that the central bank could raise interest rates before wage growth accelerates. Investors have been digesting mixed signals about when the U.K. will raise benchmark lending rates — now held at 0.5% — with forecasts largely converging around the beginning of next year.
USD/JPY added 6 points to trade at 102.63 as the US dollar gained momentum as yen traders are now expecting to see additional stimulus in the near term from the Bank of Japan after early data this month was dismal. A domestic survey of 106 major companies has found that 100 expect the economy to expand toward year-end, and that 76 do not oppose the government’s plan to complete the doubling of the sales tax to 10 percent in 2015, a poll says.
AUD/USD added 16 points to trade at 0.9341 after the release of minutes from the August 5 RBA meeting. The Australian dollar is trading in a tight band overnight with little in the way of economic data to force a significant move in either direction. However, the unit has further strengthened its position above 93c ahead of a couple of potential market-moving events. Australia’s central bank sees significant uncertainties around the economic outlook, which was why interest rates were likely to stay at record lows for some time yet.
Gold gained just under $2 to trade at 1301.20 with no specific direction ahead of US data and the upcoming Jackson Hole conference. Bullion is trading little changed near the $1300 an ounce mark. Lack of any major data and talks between Ukraine and Russian officials kept gold prices in a ranged manner on Monday however we might see some momentum coming back into the space as we have number of important readings from the UK and the US today.