Forex Market Review – Markets subdued ahead of ECB, BOE policy decisions

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Euro slipped against the dollar during European trading but still remained within recent ranges as market participants are cautious ahead of the European Central Bank policy meeting tomorrow. Expectations are for a 25 basis point rate cut.


EURUSD opened in Europe at 1.2592 and slipped 0.2 percent. Slightly better than expected euro zone PMI helped stabilize the euro above a session low of 1.2555. Going into the North American session, trading volumes will be light due to the U.S. Independence Day holiday.


Sterling is weak, down 0.3 percent in the session after being weighed down by UK Services PMI data that showed a decelerated pace of growth. Tomorrow’s Bank of England policy meeting is in focus where expectations are for further quantitative easing. GBPUSD opened the Europe session at 1.5676 and slid to1.5629.


USDJPY remains unchanged from yesterday’s close as markets trade in a limited range around 79.80 given today’s U.S. holiday and ahead of event risk tomorrow, regarding ECB and BOE meetings.  Recent risk appetite has kept demand for safe haven assets subdued. EURJPY made small moves, trading between lows of 100.22 and highs of 100.48


Aussie corrected due to profit taking after hitting a new two-month high in the Asian session following strong domestic retail sales data today. Higher commodity prices recently also help support the commodity-linked currency. AUDUSD slid to 1.0259 from the earlier high of  1.0317.