EUR/USD
Today’s session was once again another quiet one for the pair, with EUR/USD trading in a rangebound manner for the first half of the European session, despite EUR managing to gain some modest support amid talk of month-end buying in the EUR/GBP by a major EU central bank. In terms of economic commentary, we did see ECB's Nowotny say too low inflation in Eurozone is a problem whilst Draghi added to yesterday’s rhetoric by saying the ECB has the tools needed to get to inflation target, although neither comment managed to provide the pair with much in the form of direction. In the latter half of the session, participants saw a better than expected durable goods release from the US, which did see USD gain some support and guide the EUR/USD into negative territory in what was a largely uneventful session for the pair. Looking ahead, tomorrow sees the release of the German jobs report and Eurozone money supply statistics.
GBP/USD
GBP/USD initially edged higher following weekend comments from BoE’s Bean who said he expects rates to hit 3% in 3 years and rates are to be raised in 'small baby steps' whilst the CBI revealed firms are at their most optimistic levels since 1998. Further initial support was also provided by reports that UK Chancellor George Osborne is looking to resist pressure to curb the housing stimulus provided by the Help-to-Buy scheme, which would be a GBP positive move. However, the pair came off these highs as GBP began to underperform against the EUR amid the aforementioned talk of month-end buying in the EUR/GBP by a major EU central bank. The move to the downside was then exacerbated by a particularly disappointing UK housing data release and participants responding to AstraZeneca confirming talks with Pfizer have ended and therefore removing the possibility of M&A related flows for the pair. Looking ahead for the pair, the main focus will now be upon BoE’s Carney who is due to speak after-market today.
USD/JPY
Overnight, the pair managed to extend its gains below the 102.00 handle whilst the EUR/JPY was also placed under pressure on touted leverage selling, as market participants focused on reports which suggested the BoJ has already begun early planning on how to wind back its stimulus policies. However, this move to the downside was consequently pared in the latter half of the session as USD began to claw back some ground with the USD index moving back up towards its 200DMA heading into the US durable goods release. These gains were then extended as the pair moved into positive territory amid favourable interest differential flows at USTs ebbed lower ahead of upcoming supply. Looking ahead, all eyes will now be on BoJ’s Kuroda who is due to speak overnight.