Currency Analyst since 2010

Oct. 30: Asian session

USD strengthened yesterday amid weaker than expected US economic data and the upcoming FOMC meeting. Today the mood remainы pretty much the same.

EUR/USD declined to $1.3730. Still, euro’s supported ahead of data due to 08:00 GMT forecast to show Spain’s economy expanded for the first time in more than 2 years (forecast: +0.1%). Also watch German unemployment change at 08:55 GMT and CPI and German and Italian debt auctions. The ECB’s official Nowotny said the ECB doesn’t have tools to fight back the euro strength.The evening will be very tense with the release of ADP employment report at 12:15 GMT, CPI at12:30 GMT and, the most important, the FOMC statement at 18:00 GMT.

GBP/USD is trading in the $1.6040 area after dipping to $1.6020 earlier. USD/JPY is consolidating in the 98.10/98.30 range after the yesterday’s decisive rise from 97.50. Market is waiting for the BoJ meeting outcome on Thursday. The regulator will also release its “Outlook for economic activity and prices”. USD/CHF rose to 0.9000.

AUD/USD has recovered from $0.9460 (lowest since mid-October) to $0.9495. NZD/USD had a volatile session, first dipping to $0.8210 and then recovering to $0.8265. Kiwi’s initial drop was caused by the news that Moody’s has ‘discussed’ cutting New Zealand’s AAA rating. “New Zealand has the largest negative net international investment position from the AAA countries, so we discussed cutting the rating, but decided we should not downgrade New Zealand”, Moody’s executive said. Meanwhile, NZ Prime Minister John Key said that the country is among the fastest growing developed nations. RBNZ will announce its monetary policy decision today at 20:00 GMT. USD/CAD reached the highest level since September at 1.0472 before declining to 1.0460. Canadian dollar fell to a 7-week low after Bank of Canada Governor Stephen Poloz said he would extend a 3-year pause in interest-rate increases.

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