A quiet start to an important week for the euro
City Index September 3, 2012 5:20 PM
<p> EUR/USD Range: 1.2440 – 1.2675 Support: 1.2520 Resistance: 1.2600 Following a relatively quiet week on the data front, along with the US bank holiday […]</p>
Range: 1.2440 – 1.2675
Following a relatively quiet week on the data front, along with the US bank holiday today, there are no surprises this morning with things off to a very slow start. This morning saw the release of European manufacturing figures which came in line with expectations. However, things are set to heat up towards the end of this week, with all eyes on Thursday’s ECB meeting. The two focal points should centre on seniority of the single currency and details of the bond buying programme. The general consensus is for a cut in rates of 25 basis points, from 0.75% to 0.5%. Thursday, 6 September, brings the eurozone Q2 GDP at 10am and the ECB rate decision at 12.45pm.
Range: 1.5750 – 1.6000
Cable traded a 35-pip range overnight between 1.5850 – 1.5885. Following July’s surprisingly weak manufacturing PMI figure, expectations were modest for this morning’s release. However, sterling saw small gains on the back of the strongest reading in four months at 49.5; the reading was widely expected to come in at 46. Cable will most likely remain range-bound for the rest of this afternoon, with our next point of focus being Services and Construction PMI throughout the week, and ultimately, Thursday’s Asset purchase target and BoE rate decision.
Range: 1.0100 – 1.0360
The Australian dollar was probably the most prominent mover overnight following weak Australian data and even more weak Chinese data. Falling August PMI suggests Chinese growth has slowed further in the third quarter with unemployment being the key macroeconomic indicator to watch for potential government action. Rising production costs and slowing external demand are also to account for the weaker data. Poor domestic retail sales caused the AUD to push lower against USD, printing lows of 1.0240.
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