OPENING COMMENT
Asian trade has been very quiet with most currencies holding at or near daily opening levels. Two currencies which do however stand out are Aussie and Sterling, both for different reasons. Aussie has outperformed on the session against all currencies, aided by the better than expected Westpac leading index numbers which point to a faster recovery than anticipated. Sterling on the other hand continues to be weighed down on the back of yesterday’s talk from the Bank of England that they would be looking to reduce the discount rate. Elsewhere, Pimco’s Bill Gross has reportedly raised holdings of government related debt in his Total Returns Fund. It will be interesting to see how the markets hold up into Wednesday after the DJIA managed to post yet another fresh 2009 high on Tuesday, following the stronger batch of US data and comments from Fed Chair Bernanke who said for the first time, the recession is “likely over.” Looking ahead, Swiss retail sales (0.7% expected) are due at 7:15GMT, followed by the more important UK employment data (5% expected). Swiss ZEW and Eurozone CPI (0.3% expected) caps things off at 9:00GMT. Global equities are tracking higher, while commodities are mixed.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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