Last night, the economic data agitated the currency market even though the final closes were nearing the opens.
The Eurozone CPI rose by only 0.3% in September – a fresh low since October 2009. The core CPI grew 0.7%, lower than the expected 0.9%. The data most likely will lead the ECB to introduce further stimulus policy. The next ECB meeting will be this Thursday, with the market expecting a scale of 400-500 billion Euro ABS purchasing program to be disclosed. The Euro fell to a two-year low against the Dollar after the release of its CPI dropping as low as 0.6% to 1.3614.
Moving into the American trading hours, the Canadian GDP saw little change in July from the previous month, whilst the expectation was a 0.3% expansion. The Canadian Dollar lost 0.4% and the USDCAD climbed to a new recent high of 1.12.
On to the commodity currencies, the Kiwi/Dollar is still weak but the Aussie/Dollar showed some unconfirmed sign of reversal in the 4-hour chart. The Aussie refused to refresh its lows and upwardly broke the steep downtrend from the 0.94 point. The RSI in the 4-hour chart also suggested a sign of a bottom. As previously mentioned, the year low of 0.8650 will be the target for the Aussie and may provide strong support to the currency. Traders now should seriously consider the possibility of a rebound.
The Asian stock markets finished with mixed results yesterday. The Shanghai Composite moved 0.26% up to 2364. The Nikkei Stock Average slumped 0.84%. The ASX 200 bounced 0.54% to 5293. In European stock markets, the UK FTSE was down 0.36%, the German DAX gained 0.55% and the French CAC Index surged 1.33%. U.S. stocks fell slightly. The S&P 500 lost 0.28% to 1972. The Dow edged down 0.17% to 17043, while the Nasdaq Composite Index dropped 0.28% to 4493.
On the data front, the Chinese Manufacturing PMI will be released soon at 11:00 AEST. Australia Retail Sales will soon follow half an hour later. The UK Manufacturing PMI will be at 18:30. At the beginning of US trading hours, US ADP Non-Farm Employment Change and ISM Manufacturing PMI should be closely watched.
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