It was a quiet session indeed, as traders looked to position themselves before tomorrows FOMC announcement, and the Yen gained ground as stocks slid in China.
The Yen made some late gains in an otherwise peaceful trade day as deteriorating equities across Asia fueled a late move in risk aversion. For the better part of the session EUR/JPY traded in a less than 30 pip range, but as the day wound down the Yen made gains as Chinese stocks fell by over 2%. The EUR/JPY pair then had the bottom drop out as it fell to a low just under 134.90 after posting earlier highs just shy of 136.00. All the yen crosses suffered the same fate as the usual uncertainty and position squaring prior to a FOMC decision dominated the day's moves. While it is widely expected that the US rate will remain in its 0 – 0.25% range, there is speculation of the Federal Reserve reeling in some of its quantitative easing policies due to a brighter economic outlook. Any such moves could catapult the US Dollar, thus keeping the faint of heart sidelined.
In other markets, most notably the EUR/USD, the greenback stayed steady with the pair skipping in a 30 pip range between 1.4165 and 1.4135 for the session. GBP/USD moves were similar, in this instance it stuck in a 36 pip range between the prices of 1.6507 and 1.6471.
Farther off in the Pacific Rim, the Aussie dollar continued to get beat up, dropping from just over the 0.8300 big figure to near 0.8240 on the day. NZD/USD was softer as well, dropping from just under 0.6690 to levels close to 0.6640. Both the Aussie and the Kiwi slid against the Yen as well.
All eyes are on the conclusion of the two day FOMC meeting which will culminate with the rate decision at 18:15 GMT.
Upcoming Economic Data Releases (London Session) prior expected
| 8/12/2009 | 6:45 | FR | Consumer Price Index (MoM) | JUL | 0.10% | -0.50% |
| 8/12/2009 | 6:45 | FR | Current Account (EURO) | JUN | -2.2B | - - |
| 8/12/2009 | 6:45 | FR | Consumer Price Index (YoY) | JUL | -0.50% | - - |
| 8/12/2009 | 6:45 | FR | CPI - EU Harmonised (MoM) | JUL | 0.10% | - - |
| 8/12/2009 | 6:45 | FR | CPI - EU Harmonised (YoY) | JUL | -0.60% | - - |
| 8/12/2009 | 8:30 | UK | Claimant Count Rate | JUL | 4.80% | 4.90% |
| 8/12/2009 | 8:30 | UK | Jobless Claims Change | JUL | 23.8K | 28.0K |
| 8/12/2009 | 8:30 | UK | Avg Earnings inc bonus 3M/YoY | JUN | 2.30% | 2.40% |
| 8/12/2009 | 8:30 | UK | Avg Earnings ex bonus 3M/YoY | JUN | 2.60% | 2.50% |
| 8/12/2009 | 8:30 | UK | ILO Unemployment Rate (3mths) | JUN | 7.60% | 7.70% |
| 8/12/2009 | 8:30 | UK | Manu.Unit Wage Cost (3Ms/YoY) | JUN | 7.10% | - - |
| 8/12/2009 | 9:00 | EC | Euro-Zone Ind. Prod. sa (MoM) | JUN | 0.50% | 0.20% |
