Tight ranges ensue in run up to ECB announcement

United States Dollar:

The pound was steady throughout most of yesterday’s trading session. The US dollar firmed up in the morning, and GBP/USD slipped to a low of 1.6216. Investors were fairly unresponsive to UK Chancellor George Osborne’s speech at the Conservative party conference, with his speech focussing on further austerity measures and tax credits. There was a bit of data yesterday; US personal spending and income printed in line with market expectations whilst Pending Home Sales were weaker than expected in August, falling 1% to 104.7. The tight range may well ensue today unless data surprises the market. First up is UK current account numbers while at the same time, we are due the final q/q GDP reading. Later this afternoon, US Chicago PMI and CB Consumer Confidence are due and later in the evening MPC member Miles is due to speak.

Euro:

EUR/USD has also been confined to a tight range over the last 24 hours, trading between 1.2669 and 1.2715. German inflation data was mildly stronger than expected yesterday, which gave the single currency a slight boost, whilst the weak US housing number combined to see EUR/USD trade to its day high. German unemployment data has just been released and was slightly disappointing – it means the euro is back off and trades at 1.2680 currently. European CPI Flash Estimate is due later this morning but it will take a big surprise for EUR/USD to snap out of its recent range, especially so as we approach the main event of the week being the ECB monetary policy decision and accompanying press conference on Thursday.

Aussie and Kiwi Dollars:

The kiwi is still licking its wounds after the RBNZ intervention over the weekend and the jawboning from various officials. That said, it has bounced a little on general profit taking following the big sell-off and lowering gap early in the week. AUD/USD followed this trend, finding solid support at, and just under, the .87 big figure. China’s HSBC Final Manufacturing PMI data was released overnight, but it printed as expected so failed to make an impact. Meanwhile the GBP/AUD and GBP/NZD cross rates continue to hold on to recent gains and trade at 1.8595 and 2.0900 respectively.

Data releases for the next 24 hours:

AUD: AIG Manufacturing Index, Retail Sales m/m, Commodity Prices y/y

EUR: CPI Flash Estimate y/y, Core CPI Flash Estimate y/y, Unemployment Rate, Italian Prelim CPI m/m

GBP: Current Account, Final GDP q/q, Index of Services 3m/3m, Revised Business Investment q/q, MPC Member Miles Speaks

NZD: No data

USD: S&P/CS Composite-20 HPI y/y, Chicago PMI, CB Consumer Confidence