Euro weaker on ECB fears

Today's Highlights

Euro weaker on ECB fears

Usd stronger on data

FX Market Overview

Tuesday was the first day back for most UK traders and they were probably wondering why they didn't stay at home. The lack of data meant the markets traded minor ranges for the most part.

The exception was the US Dollar which got a boost from strong US Durable Goods data which showed new orders leapt by 22.6%. A huge order secured by Boeing boosted the numbers but it is all new business nonetheless. Consumer Confidence was also up; the index rose to 92.4 in August against a July figure of 90.3. That's the best reading since October 2007 and it adds weight to the pressure on the Federal Reserve to start tightening the money supply. That strength is being enhanced by investors buying the USD as a safe haven while tensions in Ukraine, Palestine/Israel and elsewhere in the middle-east are heightened.

The euro remains weak though in anticipation of the ECB starting to expand the money supply either through QE type packages or some sort of bond arrangement. With the Euro below $1.32 and easing up to higher levels against the Pound, we can expect this trend to continue in light of the data vacuum today

Overnight news of a 1.2% drop in Australian Construction work was largely ignored by the markets. The forecasts for this data were poor anyway so perhaps traders were ready for it. However, a drop in Chinese consumer sentiment would not have helped the currencies of the supplier countries and Australia is at the forefront there. I suspect we may see some weakness in the Australian Dollar in the days ahead.

And some words are losing their usage. Marvellous has been usurped by 'Awesome'. Fetch has been replaced by 'get' and no one uses the term, 'fortnight' any more according to researchers at Cambridge University. I propose we start using these words again because not everything is awesome and fortnight has far more interest than just saying two weeks. I think it would be just marvellous if we could all just do that. And I'll end with word that is apparently only used by me these days; Cheerio.