EUR/USD
The release of weaker than expected ZEW survey, together with source comments suggesting that the Bundesbank may be open to more aggressive ECB measures to meet inflation goals saw EUR come under broad based selling pressure, with the EUR/USD falling below the 100DMA line as a result. However as the session progressed, touted buying by Asian names, as well as temporary USD weakness following the release of much weaker than expected US Retail Sales report saw the pair come off the worst levels of the session.
GBP/USD
Touted profit taking ahead of the eagerly awaited Quarterly Inflation Report which is due to be published on Wednesday and a stronger USD stemming from broad based EUR weakness, which also resulted in lower EUR/GBP cross, meant that the pair traded in the red for much of the session. Tuesday. Still, the release of much weaker than expected macroeconomic data from the US in the second half of the session saw the USD index come off the best level which also enabled the pair to partially retrace earlier losses. The QIR is not only expected to confirm market expectations that the BoE will hike rates in March next year but also raise growth forecasts.
USD/JPY
The pair failed to maintain initial upward bias, inspired by further alleviation of fears surrounding Ukraine, as the release of weaker than expected US retail sales data prompted flight to quality trade. Going forward, market participants will react not only to the release of somewhat disappointing US retail sales data, but also less than impressive Chinese Industrial Production and Retail Sales report which were released during early stages of trade in London and may have been partly overlooked.