Daily Forex Overview

Previous session overview

On Wednesday, the dollar declined to nearly a four-week low against the yen on the release of disappointing U.S. retail data.

The risk-sensitive euro also continued its week-long slide against the yen and dollar, coming under further selling pressure after Standard & Poor's followed through on a recent warning to downgrade the credit rating of Greece.

The euro slipped for yet another day versus the US dollar and Japanese yen, as a combination of risk aversion and speculation of a rate cut by the European Central Bank on Thursday morning weighs on the currency.

GBP was relatively well behaved, ranging between support at 1.45 and 1.47, the strength likely driven by a large repatriation order.

USDJPY did dip below 89 briefly, but that level has held well since Monday; when it does break, it should provide solid resistance.

The Canadian dollar remains range bound, despite a reprieve in falling oil prices as the Saudi's vow to cut oil production and a record cold snap in the mid-west, heightens demand for oil.

Growing jitters in financial markets and poor economic data both in Australia and offshore pushed the Australian dollar to a fresh one-month low late Thursday. Domestic jobs data have weighed on the Australian currency. While the headline fall in jobs was not as bad as economists expected, a closer examination of the data shows the deterioration in the jobs market escalating. The Australian dollar was trading at USD0.6590, down from USD0.6777.

Market expectation

The euro is under marginal pressure against the yen and dollar on Thursday, in yet another swing in the market's mood.

Early European dealing has seen a move to marginal lows for the day at USD1.3143, with traders anticipating a relatively calm morning ahead of today's keenly awaited ECB interest rate announcement. Stops are placed through USD1.3130, with better demand coming in at USD1.3080 and additional stops through USD1.3050. Topside sees light offers at USD1.3180/1.3200 with stops at USD1.3255, said to be more significant on a break of USD1.3285.

Traders are cautious on the euro ahead of the European Central Bank meeting Thursday. The consensus calls for a 50 basis-point rate cut, but policymakers could surprise on both sides of that mark, say foreign exchange analysts.

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