3 Feb 2014
European Open: Euro remains subdued on ECB expectations
FXstreet.com (London) - AUD saw some choppy trading overnight but has zeroed out any moves as the European session opens. Eyes are on tomorrow’s rate decision and accompanying statement from the Reserve Bank of Australia. While the RBA will almost certainly hold rates at 2.5 percent, bets are on whether the central bank will move away from an easing bias.
China remains closed for New Year, contributing to reduced liquidity.
The Kiwi dollar recovered some ground on comments from the New Zealand treasury that the Reserve Bank of New Zealand will move to hike rates in March, echoing comments from RBNZ governor Graeme Wheeler last week after the central bank held rates at its January meeting.
European PMIs due this morning may give the Euro some much-needed support after inflation concerns and weak business credit drove euro bearishness last week. December producer prices due to be released tomorrow are expected to show a further decline, down 0.8 percent after the 1.2 percent drop in December. The euro has been under pressure on increased bets the the European Central Bank will move to cut already ultra-low interest rates in a bid to free up Eurozone lending.
Consensus expectations are for a slight decline in UK manufacturing PMIs, however there could be room for surprise to the upside thanks to a robust new orders component.
In the US, expectations are for a small decline in the ISM manufacturing index to 56.0 from 57.0 in December, but remaining in strong positive territory.
China remains closed for New Year, contributing to reduced liquidity.
The Kiwi dollar recovered some ground on comments from the New Zealand treasury that the Reserve Bank of New Zealand will move to hike rates in March, echoing comments from RBNZ governor Graeme Wheeler last week after the central bank held rates at its January meeting.
European PMIs due this morning may give the Euro some much-needed support after inflation concerns and weak business credit drove euro bearishness last week. December producer prices due to be released tomorrow are expected to show a further decline, down 0.8 percent after the 1.2 percent drop in December. The euro has been under pressure on increased bets the the European Central Bank will move to cut already ultra-low interest rates in a bid to free up Eurozone lending.
Consensus expectations are for a slight decline in UK manufacturing PMIs, however there could be room for surprise to the upside thanks to a robust new orders component.
In the US, expectations are for a small decline in the ISM manufacturing index to 56.0 from 57.0 in December, but remaining in strong positive territory.