EUR/USD – starting to show on the radar screens is Thursday’s ECB policy meeting with traders and analysts chewing the cud over whether or not the ECB will trim rates again by 25bps, as it did in November and December. Some in the market calling for the ECB to trim rates again, while others suggest that the Bank may remain on hold until after the next eurozone Summit set for late in the month, though we note that within the trader community, the topic has received very little attention thus far, despite the proximity of the meeting. Some talk now of an advisory firm report coming down on the “no change” side, but EUR holding $1.2780 and unfazed by the chatter.
GBP/USD – deflated to $1.5465 area ahead of the London fixing but pair continues to respect the demand interest at $1.5450 and rebounds slightly for trade to $1.5485/90 around the event. Offers continue to cap the pair atop $1.5500.
USD/CAD – gained against the USD Tuesday morning as trade news from China led investors to improve their appetite for commodity-based assets. The USD was at C$1.0177 recently, from C$1.0235 late Monday, according to data provider CQG. Most higher-yielding currencies strengthened against the USD after lower-than-expected Chinese import data released on Tuesday suggested that the world’s second-largest economy would ease monetary policy to prevent growth from slowing, driving up the CAD, AUD and NZD currencies. Meanwhile, comments made by Fitch earlier on Tuesday that it does not plan to downgrade France’s credit rating helped to improve market sentiment.
GOLD – spot gold holds at at $1637.25/oz, down from an earlier high of $1639.46 and up from an overnight low of $1609.50. Gold has taken out its 200-day moving average (around $1634.35 currently) for the first time since Dec 21, when the precious metal saw a similar spike higher. Gold will need to close and maintain a toehold above the 200-day for upward momentum to mount. The near-term target is the Dec 21 peak at $1641.50 and beyond that the Dec 13 breakdown peak at $1677.69.
EasyForexNews Research Team