Forex Market Review – Aussie dollar slips after weak jobs data; euro calm ahead of ECB

Important: This page is part of archived content and may be outdated.

EURUSD consolidated further into a range in the Asian session as investors cautiously await the ECB policy meeting later today. Speculation is that the central bank will cut interest rates. In such a case this would paradoxically help support the euro. Also today, European leaders begin meetings that will culminate in the EU Summit on Friday. German Chancellor Angela Merkel and French President Nicolas Sarkozy have proposed broad treaty changes that would toughen fiscal rules and impose automatic sanctions on countries that violate budget limits. EURUSD opened in Asia at 1.3410 and moved into a triangle between 1.3391-1.3414.

 

The dollar index, which measures the U.S. unit against a basket of six major rivals, traded at 78.470, little moved from the 78.476 level in North American trade late Wednesday.

 

The Bank of England was also slated to meet later today and is expected to leave its monetary policy unchanged, with the key interest rate at 0.50 percent. After rising 0.8 percent in New York trading on Wednesday, GBPUSD held on to gains in Asia, trading a tight range of 1.5690-1.5714.

 

The Australian dollar fell after jobs data. The Australian unemployment rate unexpectedly rose to 5.3 percent from 5.2 percent, underscoring the threat to global growth due to the eurozone debt crisis. The number of people employed in Australia fell by 6,300 last month after a revised increase of 16,800 the previous month.  AUDUSD opened in Asia at 1.0290 and fell to 1.0232.

 

The New Zealand dollar was little changed in Asia, trading in a tight range against the US dollar. The country’s central bank kept interest rates on hold on Thursday at 2.5 percent. After dipping briefly the kiwi rose slightly. NZDUSD traded between 0.7810-0.7783.

 

The Japanese yen gained against the euro and dollar in a risk off environment. EURJPY opened Asia at 104.51 and slid to 103.97. USDJPY traded a tight range as well, opening the session at 77.66 and closed at 77.64.