Good morning from wonderful Hamburg. Due to the terror attack last night as many people died in India, stock and bond markets will be close on Thursday, countries’ central bank said in a statement.
Market review
Inflationary pressure is coming down in the euro zone and the ECB has room for another rate cut, ECB governing council member Christian Noyer said. Euro zone inflation is expected to remain under 2 % throughout next year, due to a fall in commodity prices and a slowing economic growth, he adds. He doesn’t rule out a rate cut by the ECB as inflation in Germany, the euro zone’s biggest economy, tumbled this month. The EUR/USD was back again above the 1.29 level while some traders believed in more gains of the currency pair.
The ECB is going to hold a policy meeting on December 4th and analysts expects another 50 bps cut, which will take interest rates to 2.75 %, the lowest level for more than 2 years. The EUR/JPY was 0.27 % down and trades currently around 122.60 while the USD/JPY still trades above the 95.00 level. Data on Wednesday showed U.S. consumer spending reached its biggest drop in more than seven years in October while the consumer confidence fell to a 28-year low in November.
Australian Q3 capital spending is 0.6 % up qtr/qtr, which is above the forecast of the 0.5 % increase. Actual Q3 capital expenditure is at A$ 23.25 bln (15.2 bln USD). The AUD/USD trades stable at 0.6503 with a day-opening at 0.6517.
EUR/USD
After breaking through the 1.28 resistance line on November 24th the EUR/USD traded in a zigzag formation. If the market will break the 1.28 support line it could fall further, otherwise it could continue its zigzag formation with a break through the current bearish trend line.
GBP/CHF
Since the middle of September the GBP/CHF has been trading in Fibonacci retracement lines. After touching the 1.75 retracement line the market recovered and trades now at the 38.2% line. If the pair doesn’t enter the middle retracements, it could come to a return to the 1.75 support line.
