The USD continued its decline on Wednesday against many of the major currencies as the broad markets exhibited nervousness – this as equities turned in mixed results and gold once again climbed to new highs. The U.S. saw the release of the ADP Non Farm Employment Change numbers and they came in worse than expected. However, the impact from this particular jobless report is not what the impact of tomorrow’s official Non Farm Employment Change statistics could be. Today the States will release weekly Unemployment Claims and the projected amount nearly matches last week’s number.
Both the EUR and GBP continue to find strong backing and both of their respective Central Banks are scheduled to participate in the spotlight today. The ECB and BoE are both set to announce their interest rates – which will both likely remain unchanged. The real drama from ECB and BoE could develop with any comments regarding the prospects for their economic futures and stimulus & austerity. The sudden strength of the EUR and GBP will do their respective export hopes no good. Germany is the engine of the European economy and if the EUR continues to garner more value there is bound to be talk about lack of stability in the financial landscape. Meaning that today’s press conference with ECB President Trichet could be an unique event in the afternoon.
The price of Gold broke upwards and went to new highs and it has taken the AUD with it. The AUD continues to trend according to the price of the precious metal and they must be watched together by anyone participating in the AUD at this time. The JPY has also broken through to new highs against the USD and investors who questioned the ability of the Bank of Japan to actually affect the strong trend of the Japanese currency have been rewarded the past few days.
The currency markets these next two are likely to bring plenty of swift trading as plenty of data and news events flourish. The combination of jobless data from the States, Central Bank news from Europe and the U.K. combined with the questions surrounding the Bank of Japan, and the price of Gold have the capabilities to bring about continued volatility. Traders should be careful to use their risk management well and be aware of all the events on the calendar.
Written by bforex.com