Currency Analyst since 2010

Sep. 5: Asian session

US dollar steadied just below a 6-week high on Thursday ahead of central bank policy meetings in major economies and a crucial US jobs report that could make or break the case for a reduction in US stimulus this month (watch the release of ADP employment data at 12:15 GMT).

EUR/USD slipped to $1.3180 following the yesterday’s unsuccessful attempt to recover above $1.3200. The European stock markets closed in the positive territory yesterday. ECB minimum bid rate will be announced at 11:45 GMT. It will be followed by the Mario Draghi’s press conference at 12:30 GMT. GBP/USD is down to $1.5600 following the yesterday’s test of $1.5670. The BoE monetary policy decision will be announced at 11:00 GMT (no changes expected).

USD/JPY is trading on the upside for the fourth day. Today the pair has made another small step up and almost reached 100.00. Yen weakened as investors unwound their safe-haven buying spurred by concerns over US plans to attack Syria. The G20 summit starts today in Russia. Syrian problem is going to the focus there. The Bank of Japan left its policy unchanged saying that a moderate recovery is under way. USD/CHF rose to 0.9400.

USD/CAD is trading in the 1.0480/99 range. Yesterday the pair had a volatile day and has finally formed a strong bearish candle with a low at 1.0475. As expected, the Bank of Canada left the rated unchanged, but the overall tone of the policy statement was quite dovish. According to BoC Governor Poloz, the lack of investment has negative implications for growth in 2014 and will work to keep rates locked at 1.00%. The yesterday’s increased demand for the loonie can be explained by the overall risk-on sentiment.

AUD/USD retreated a bit to $0.9150 after yesterday it closed at $0.9170. Australian trade balance switched to deficit. NZD/USD slid a bit from the $0.7900 handle.

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