Search ForexCrunch

USD:  The data in the US is all second tier in the form of PPI, Michigan confidence and industrial production.   Michigan has the potential to cause some wobbles on the dollar, coming later in the session and ahead of the weekend.

EUR:  Inflation data is just the final release, so some chances of revision but they should not impact the single currency. Inflation is seen holding at 1.4%.

See how to trade the US consumer confidence with EUR/USD

Idea of the Day

FX markets can take some comfort from the more stable tone seen in Asia overnight, with Japanese equities up around 2%. But of course, this follows on from a fairly sharp correction.

The focus starts to shift to the FOMC meeting next week, with expectations surrounding the Fed having been responsible for a good deal of the volatility seen on the dollar over recent weeks.   So far, the dollar index has fallen every day this week, with the oversold nature of some currencies (such as the Aussie) helping given the fight-back.

From here, we are likely to see increased volatility until the Fed meetings passes on Wednesday next week.   Understandably, markets are extremely nervous of the prospect of the Fed stepping back the pace of monthly asset purchases, but for now, the labour market does not appear to be on a solid enough footing for that step to be taken.

Latest FX News

GBP:   Nudging above the 200-day moving average late Thursday (currently at 1.5700) and this will be the level to watch today, together with yesterday’s high of 1.5738.  

AUD: The generally weaker tone to the dollar allowing the upward correction on AUDUSD to continue, holding above the 0.96 level, but still underperforming vs. many others, notably the kiwi, yen and Swissie so far this week.

USD: The dollar index has fallen every day of the week so far, at levels last seen mid-February of this year.

Further reading:  Forex Analysis: USD/JPY Extends Decline