Currency Analyst since 2010

Oct. 25: Asian session

US dollar remains weak on the speculation that the Fed due to meet next week, will maintain its pace of bond purchases for longer.

EUR/USD reached 2-year high at $1.3832 today. Reports today are expected to show diverging confidence in the US and in Europe’s largest economy – Germany. German Ifo institute’s business climate index (08:00 GMT) probably climbed to 108 this month, the highest since April 2012, while American University of Michigan consumer sentiment index (13:55 GMT) probably fell to 75 this month, the lowest since January. Also watch US durable goods orders due at 12:30 GMT. Today is also the second day of the EU economic summit. GBP/USD went up to $1.6242. Britain will release preliminary GDP at 08:30 GMT (forecast: 0.8%; previous: 0.7%).

USD/JPY has lost ground, falling just below the 97.00 mark. Core CPI increased in line with forecast by 0.7% y/y (slightly below the 5-year high of +0.8% hit in the previous month). USD/CHF returned down to 0.8900.

AUD/USD is trading at session highs around $0.9620 after a dip to $0.9585 earlier in the session. NZD/USD has recovered some ground after a dip just below $0.8300. RBNZ Governor Wheeler said in a speech today that the regulator is strongly concerned by the expensive national currency. However, the bank sees the need to raise interest rates somewhere in the year 2014. USD/CAD declined by several pips but is trading above 1.0400.

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