The euro’s gains in Asia were reversed yesterday after the ECB called the report over the weekend in the Der Spiegel that the ECB had a plan to cap EZ bond yields ‘misleading’ yet despite the comments the single currency failed to break the 1.2280 level and we find ourselves this morning trading towards the top end of the recent range at 1.2380. Despite the dismal range trading seen over the month the single currency seems to be quite resilient despite the lack of action from the ECB and the SNB flow and I expect an eventual break of 1.2500.
Range: 1.5606 – 1.5738
Sterling continues to trade in a 1.5650-1.5750 range with slight emphasis to the upside after the 200-day moving was broken last week. Today, second tier data releases in the form of the PSNB data at 9.30am and the CBI’s outlook at 11am.
The RBA released their minutes from the August meeting which revealed concerns for the global economy stemming from Europe but that the Chinese economy is ‘stabilising at a more sustainable pace’. The members also noted that the domestic economy was ‘around trend pace’. The AUD is trading higher this morning and although I think the minutes from the RBA are in line with what the market was expecting I do note that there was no discussion at the meeting around the high level of the lifestyle currency.