Today is the US holiday of Thanksgiving. Typically, holiday sessions bring extremely light volume and poor trading conditions. Any moves that occur tend to lack a “healthy” ebb and flow due to the thin liquidity. Though London and the rest of Europe did not have an official holiday, the global trading environment has fit the aforementioned description. In short, the skeleton staffs and light activity made market participants appreciate more active sessions.
Rewind back to yesterday… the Carry Trade bottomed in London trading, highlighted by EURJPY sliding to 160.05 and AUDUSD collapsing to 0.8560. Despite the steady selling in other “risky” assets (equities, crude, etc) throughout the New York Session, Carry Trade pairs staged a firm recovery heading into Asia. This counter-trend rally continued until today’s pre-London trading. At 0100 EDT (0600 GMT), EURJPY faded lower, with both components contributing to the losses. The cross dropped an estimated 90 pips to a low just ahead of 161.00. As expected, the “high-yielders”, AUD and NZD slid too. In the big picture, however, most currency pairs have failed to experience any significant price movement and remain little changed from the New York closing rates.
We expect a similar market environment in the upcoming New York trading hours, unless trading is sparked by an unforeseen event.
