Key Forex Afternoon Notes:
- Bank of Japan Monetary policy meeting minutes
- New Zealand Credit Card spending y/y 6.2% vs. 4.5% previously
- German Ifo Business climate 106.8 vs. 107.4
- UK CBI realized sales +1 vs. 42
Later
- US existing home sales
The currency markets started off with the BoJ’s meeting minutes early into the Asian trading session. While the minutes did not give out any surprises, the fact that the minutes showed that the Central Bank did not foresee any further expansion to the stimulus program saw a broadly mixed reaction to the Yen crosses. The minutes also showed that the BoJ’s monetary policy see’s a recovery in inflation while keeping its options open for further bond buying, which led to the Nikkei 225 to attempt a rally towards Friday’s high at 18518, but only managing to stage a session high towards 18506. The Yen managed to make a session high of 119.355 only to reverse its gains, currently trading at 119.1 levels at the time of writing.
Both the Kiwi and the Australian dollars were weaker since the start losing ground against the Greenback and falling to session lows of 0.75 and 0.7788 respectively ahead of the US trading session open.
With no other major news releases scheduled from Asia, the markets turned their attention to the European trading session which was relatively light with the only exception being the German Ifo Business climate which missed estimates, rising modestly to 106.8 from 106.7 previously but below estimates of 107.4
The Euro was however unfettered by the data as the focus again from Europe was the Greece debt negotiations.
While earlier in the day it was reported that Eurozone members managed to agree a deal with Greece to extend its financial rescue package by 4-months, less than the expected 6-months time frame Greece initially sought. However, later during the day, rumors started circulating that Greek parliament had rejected the current bailout terms meaning that the next 4-months will see some tough negotiations take place. The Troika is also expected to weigh in with its views on Greece’s plans.
Amidst all the chaos, the EURUSD continued to trade sideways, bouncing off the range highs and lows of 1.14 and 1.13 levels with no clear direction in sight.
The British Sterling on the other hand was also weaker today falling against the Greenback, trading at 1.535 levels. The CBI distributive trades data decreased to +1, below forecasts of 34 but did not have any adverse impact on the GBP crosses.
The US trading session is also light with the exception of the existing home sales data due later in the evening. With not much of data in sight, the markets are expected to merely continue the day’s trend ahead of tomorrow which see’s important market impacting events such as Eurozone Final CPI, German GDP and Janet Yellen who is expected to testify to the senate banking committee.
