EUR/USD
The pair started the session in a steady trend lower of around 20 pips as participants reacted to comments by ECB sources last night saying this week’s cut 'won't necessarily be the final one' which further added to the divergence of the ECB (looking to cut) and the Fed (looking to hike mid 2015). Following this was the release of a host of Eurozone PMIs, although they failed to provide and guidance for the pair as they were final readings and posed no substantial deviation from expectations. Heading into the ADP employment release (179K vs. Exp. 220K), the pair traded in a consolidated range above the 1.3600 handle, before the below forecast reading spurred a bout of USD weakness and thus erased earlier losses as the pair traded relatively flat for the remainder of the session.
GBP/USD
With a lack of overnight newsflow from the UK, the firmer GBP weighed on the pair in the early stages of trade. The main focal point for the UK today was the services PMI (58.6 vs. Exp. 58.2) which saw an immediate fast money move higher for the pair of around 30 pips to erase earlier losses. These gains were then later extended heading into the North American open after tripping light stops on the break of 1.6750 to move towards the 50 DMA above at 1.6782. In the latter stages of trade the pair’s upward momentum was halted by talk of offers by Middle Eastern names at 1.6780, with the GBP/USD relatively unchanged for the session.
USD/JPY
Overnight, the pair trended higher amid the broadly firmer USD to print its highest level in a month and break above the 100DMA seen at 102.31 with little in the way of economic commentary out of Japan to guide price action. The pair traded in a relatively tight range throughout European until the US ADP report, which fell below expectations ahead of this week’s nonfarm payrolls release and weakened USD, sending the pair to trade flat at session lows. However, a final late move higher was seen following the better than expected ISM non-manufacturing report.