Daily Forex Overview

Previous session overview

On Wednesday, the dollar gained against the euro and declined versus the yen after U.S. stocks took a turn for the worse.

The euro fell slightly against the dollar after a negative outlook from European Central Bank executive board member J. Stark. He informed that weak Euro-zone growth and oil price fluctuations could push inflation briefly into negative territory.

Pound tracked the Euro falling after US Presidential election before rallying on the back of weak US data. The gains couldn't be maintained though as equities losses mounted. September Manufacturing output fell -0.8% vs. -0.3% expected. October PMI services also fell to 42.4 vs. 50.2 previously. GBPUSD traded with a low of 1.5754 and a high of 1.6197 before closing the day at 1.5900.

USDJPY closed the US session around JPY97.90, with traders then reporting a relatively calm Asian session. Exporters and life companies were keen sellers of the yen crosses as Asian indices took a turn to the downside following on from the disappointing close on Wall Street.

The Canadian dollar weakened slightly against the dollar with a fall in crude oil prices as traders took profit from yesterday.

The Australian dollar was softer late Thursday; led lower by weaker commodities prices and a downward correction in global equities markets after U.S. employment numbers were released.

Market expectation

The euro is lower against the dollar and yen as investors expect the European Central Bank to lower rates Thursday and hint of more monetary easing down the line.

Analysts saying that USDJPY and the JPY-crosses will come down, probably as tumbling stock prices raised speculation that risk aversion could strengthen.

German sales continued to knock the EURUSD lower, with stops then hit through USD1.2880 as Asian stocks took their cue from the poor performance on Wall St and euro-yen took a hit. Bids in the USD1.2850 area were easily eroded, with euro-dollar sliding to session lows at USD1.2836. Early European dealing saw a marginal extension to USD1.2827 before a relief rally to USD1.2880, with euro-dollar holding around USD1.2865 at time of writing. Attention today is squarely focused on the ECB rate announcement and press conference, with a 50bps cut widely anticipated by analysts and traders looking for a period of consolidation ahead of the release.

A reversal of a short-lived equities surge Wednesday points to a possible further sell off for the Australian dollar in the week ahead. Adding to concerns was a worse-than-expected ADP private payrolls survey that showed 157,000 jobs lost in October from September, prompting some speculation official data from the U.S. Department of Labor due Friday will be awful as well.

Most important events of the day