New York walked into a modestly firm greenback, and an empty US data calendar on Monday. EUR and GBP were the exception. Both were slightly higher.
News that General Electric (GE: NYSE) cut its dividend by 50% gave Wall Street something to focus on. GE lost 7.17%. However, GE’s bad news was isolated, and the three main indices closed up, with tiny gains.
Bank of Japan Governor Haruhiko Kuroda told an audience in Zurich that “this powerful monetary easing ... has been producing remarkable effects, we judge that the economy is no longer in deflation, which is generally defined as a sustained decline in prices.” USDJPY rallied from ¥113.25 to ¥113.70, supported by general US dollar strength.
Bank of Japan governor Haruhiko Kuroda says Japan is no longer in deflation, thanks to “powerful monetary easing" steps taken by the central bank. Photo: Shutterstock
traded with a bid in a 1.164-1.1674 range ahead of key Eurozone data on Tuesday.
bounced from the overnight low triggered by rising political uncertainty in the UK. Traders seemed to conclude that with minority governments, political uncertainty is the norm. GBPUSD rose from 1.3078 to 1.3127.
The broad US dollar strength led to commodity currency bloc weakness. AUDUSD
extended overnight losses. The bounce in USDCAD
was exacerbated by the Canadian bank holiday.
The data pantry gets replenished, beginning with releases for China's Retail Sales and Industrial Production.
Meanwhile European traders will dine on a smorgasbord of economic data releases, including German CPI, ZEW data, UK PPI and CPI reports and Eurozone GDP, ZEW and a speech by ECB President Mario Draghi
traders have been looking for direction and Tuesday’s data may be the GoogleMap that gives the directions that they need. A break above 1.1750 should extend gains to 1.1880 while a break below 1.1630 will lead back to 1.1500.
Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.