Forex trading headlines for the European morning session 3 September
- RBA leaves interest rates on hold at 2.5% as expected
- RBA statement leaves out ” scope for further easing”. AUD rallies
- RBA statement in full
- UK markit construction PMI august 59.1 vs 56.8 exp 57.00 prev
- Russian defence ministry detects two ” ballistic missiles” fired toward Eastern Med
- Israel owns up to missile launch
- Swiss Q2 GDP q/q +0.5% vs +0.3% exp +0.6% prev
- OECD says ECB has scope for monetary easing if needed
- EZ PPI july m/m +0.3% vs +0.1% exp 0.0% prev
- Japan sales tax hike decision to be made in early october
- Nikkei closes up 2.99% at 13,978.44
- Shanghai comp index closes up 1.18% at 2123.11
- Merkel says last 4 years have been good for Germany
- Spain rules out more capital injections for nationalised banks
- Germany’s Schaueble says he’s been clear that Greece may need additional aid
It’s been a lively morning with a combo of RBA, UK construction PMI data and the odd ballistic missile or two keeping us all from nodding off into complacency.
The RBA left rates on hold as expected but the statement left out a key phrase on easing and traders jumped into buy mode. AUSUSD leapt from 0.8980 to 0.9015 then rallied further to test good sell interest at 0.9050 before retreating. Overall though the currency has had a good session with AUDJPY posting highs of 90.07 and GBPAUD down to 1.7184 before bouncing.
The next major move saw better than expected UK construction PMI data which sent an already bouyant pound to 1.5604 and 0.8446 having previously found support at 1.5550 and with stop losses triggered on a drop through 0.8470. Asian sov interest to sell cable above 1.5600 put the brakes on a further move and we’ve been back to 1.5567/0.8468.
Then, just as the greenback was looking well supported with USDJPY up at 99.70 and USDCHF at 0.9370, we saw a rapid fall on reports of two ballistic missiles heading for the Eastern Mediterranean. Cue USDJPY down to 99.17 and USDCHF 0.9345 before bouncing on reports that the sightings were three hours old and no evidence of any arrival in Syria. Turns out Israel and the US were carrying out a joint ” test” exercise. Nice timing fellas, but it showed we can’t get complacent over Syria and the knock-on effect of an escalation in the conflict.
Swiss Q2 GDP came in better than expected but had little impact, and EURUSD has had another quiet- but- soft session breaking down through support at 1.3170 before finding more buyers at 1.3160.
Traders will continue to tread carefully ahead of the main events of BOE/ECB on thursday and NFP’s on friday. Softly softly til then but beware the holes in the road along the way.
