Major FX pairs were stuck in narrow ranges through a subdued Asian session Wednesday, and not even the release of Australian third quarter GDP data could rouse the market from its slumber, ahead of some key events this week. Euro-dollar was at $1.3107 as the morning ended here, after a $1.3091 to $1.3115 range, and not very much changed from $1.3094 at the U.S. close overnight. The pair struck its high, also the pair’s best level since Oct. 18, early in the session supported by demand by a United Kingdom account. The move however ran into profit-taking selling believed to be from above $1.3100 to $1.3150, dealers said. Nevertheless, for real upward progress to be made and a new higher trading range to be established, euro-dollar would need to take out the October peaks around $1.3170. Only then would traders predict scope for a return to the 2012 highs near $1.3485, traded late-February, after the European Central Bank’s second three-year LTRO.
Aussie-dollar meanwhile was also about unchanged at $1.0476 just before midday here compared with $1.0472 overnight, after a narrow $1.0466 to $1.0479 range. The key event this morning, the release of Q3 GDP data tuned out to be a non-mover for markets after the data came in largely within expectations. The data released by the Australian Bureau of Statistics Wednesday showed the economy grew 0.5% quarter-on-quarter in the third quarter compared with a 0.6% gain in the second quarter. The year-on-year pace of growth was 3.1% compared with 3.8% growth in the second quarter. The outcome of on-quarter growth was slightly lower than the median consensus of +0.6%, but the year-on-year rise was in line with expectations of +3.1%. While there are solid offers at $1.0500 (option-related) and talk of additional offers near the Sep. 21 highs around $1.0520, there are also stops if $1.0500 and $1.0520 (and $1.0540) give way, with the focus then on the September 14 peaks around $1.0624.
In other pairs, dollar-yen was at Y82.25 compared with Y81.86 overnight, marking a Y81.82 to Y82.32 range through the morning here. Dealers said the pair tracked yen crosses higher as risk sentiment improved on the back of a positive day for regional stock markets.
EasyForexNews Research Team