EUR held firm versus the USD early in Asia today. EUR/USD opened the session at $1.4831 and it is currently trading at $1.4769. ECB is expected to signal its readiness to raise interest rates after its policy meeting on Thursday, and may prepare the market for a June hike. It tightened by 25 basis points in April. News that Portugal had agreed a 3 year $116 billion bailout with the EU and IMF, was greeted with muted reaction in the currency market. The market has discounted for the moment European debt risk and the market is focused on what the Fed intends to do and what the ECB is doing.
Non-farm payrolls on Friday could provide fuel for a USD bounce. However, some analysts said bearish feeling will continue to triumph. Strong payroll data on Friday could prompt a recovery for the USD, but the upcoming end of QE will not change the fact that the Fed is staying on hold for as long as possible while other central banks are more worried about inflation.
GBP post its biggest 1 day fall against the USD in over 3 months. It fell to a 1 week low of $1.6454. This was due to data that showed that British manufacturing grew at its weakest pace in 7 months in April and a sharp slowdown in new orders fuelled speculation that the Bank of England will delay raising interest rates. BoE meets on Thursday. It is widely expected to hold rates at a record low 0.5% and some policymakers might even ditch their minority call for a rate rise following recent disappointing data.
AUD has retreated from a 29 year peak in the face of softer commodity prices and after the RBA left rates unchanged at 4.75% on Tuesday as widely expected. Weaker equities and a greater unwillingness to take risk prompted investors to book profits on some of the hefty gains made last month. AUD/USD opened the session at $1.0862 and the pair fell as low as $1.0788. The pair has risen an enormous 13% since mid March. Markets are likely to remain nervous ahead of the ECB meeting and US non-farm payroll data.
ir value in precious metals. Gold hit record highs in 11 out of past 14 sessions and silver has surged more than 20% since mid-April to a 31-year high of $49.77 on April 28.