The mid-week London Session has offered a repeat of yesterday's trading thus far, characterized by indecision that has resulted in a range bound market. Following the much-anticipated EURUSD advance beyond $1.60, we have yet to see any convincing follow-through. It would appear as though there is a hesitancy of market participants to put new money to work in the pair. Instead, profit-taking has ensued, leaving eager traders disappointed. The lone noteworthy item of news has been out of the Bank of England, which released its Minutes from the last meeting.
For a second straight day, the US dollar has come out of the gate with strength. Both EURUSD and GBPUSD were pressured on the open, sending both pairs reeling. In fact, Cable forfeited nearly a big figure (market talk for ''100 pips'') and dealt down to 1.9870. In a replay of 24 hours ago, the Greenback rally halted abruptly, sparking a rebound and establishing a range for the early part of the London Session. At 0830 GMT (0430 EDT), the Bank of England released the Minutes from the April meeting in which rates were cut by -0.25%. The voting results of 6-2-1 (two for no change, one for -0.50%) served as a catalyst for a rally in the British pound. In a delayed move, GBPUSD jumped 75 pips from 1.9900, eventually retracing about half the ascension. Finally, as mentioned in the GAIN Capital Asia Session Update, the Australian Dollar has hit a new 24 year high versus the US dollar and now sits perched atop 0.9500.
The economic agenda again looks light. There are no major releases out of the US today. The 0830 EDT Canadian Retail Sales numbers will surely be watched, especially following the half-point interest rate cut by the bank of Canada yesterday. As is becoming the daily case, traders are also keeping a close eye on other financial markets - - - most importantly, commodities.
Upcoming Economic Data Releases (New York Session)
- 0830 EDT Canada â€“ Feb Retail Sales MoM, consensus: +0.1% (relevance: medium)
- 0830 EDT Canada â€“ Feb Retail Sales ex-Autos MoM, consensus: +0.4% (relevance: medium)