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Currency Analyst since 2010

Sep. 23: Asian session

EUR/USD is consolidating in the tight $1.3535/20 range. The pair is, therefore, near a 7-month high of $1.3570 renewed on Thursday. According to the results of the German election, Merkel’s Christian Democratic bloc took 41.5% of the vote vs. 25.7% for the Social Democrats. Despite the strong result of the Christian Democratic Union (CDU), Merkel’s coalition with the Bavarian Christian Social Union (CSU) lacks the overall majority, so they will possibly form a coalition with the Social Democrats. We’ll watch how the market digests the election results. Don’t miss the PMI releases of the euro zone’s leading economies (07:00-08:00 GMT). The ECB President Mario Draghi will speak in the European Parliament at 13:00 GMT.

GBP/USD rose above the $1.6000 mark, remaining capped at $1.6030. USD/JPY is trading on the downside, though supported by the 100-day MA at 99.05. Japanese banks are closed in observance of Autumnal Equinox Day. US dollar fell versus yen as markets assess when the Fed will reduce the pace of its bond purchases. The FOMC voting member William C. Dudley is scheduled to speak today at 13:30 GMT. On Friday St. Louis Fed President James Bullard indicated an October move is possible. USD/CHF is trading above 0.9100, up from 0.9089.

AUD/USD rose by about 60 pips to $0.9430. Aussie rose as Chinese HSBC flash manufacturing PMI increased from 50.1 to 51.2, slightly above the forecast of 50.9. NZD/USD recovered by about 30 pips from $0.8340. USD/CAD opened with a bullish gap, but then slipped to 1.0290.

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