Cautious Trading Across The Boards

A solid day of range trading took place within the broad market place. The currencies essentially saw the USD trade strong early on and then tend to give back a bit of ground as the day progressed. The reason for this may have to do with the amount of data coming from the U.S. today and the critical U.S. election that will take place this coming Tuesday. Weekly Unemployment Claims turned in a figure of 434k, beating the anticipated mark of 453k. But the weekly Unemployment Claims number remains unflatteringly high and its result yesterday will not win the hearts of investors or voters. The Advance GDP statistics will be brought forth today and it is projected to have a result of 2.1%. This number will give good insight into the strength of the economy. Also on the calendar today is the Chicago PMI reading and the University of Michigan’s Revised Consumer Sentiment marks. Wall Street was nearly flat in trading yesterday and this reflects the amount of tentativeness in the marketplace before the elections that will take next week and could usher in a ‘new voice’ in Washington.

The EUR and GBP both picked up slight value as the day progressed and it will be of interest to see what traders do before going into the weekend. The U.K. will release Net Lending to Individuals and Final Mortgage Approvals today. Yesterday the Nationwide HPI and the CBI Realized Sales from the U.K. both disappointed coming in below expectations. And to show just how little the negative data was taken into account the GBP promptly rose as the day moved along. Sentiment remains fragile globally and investors are geared largely towards the mechanics of Central Bank ruminations. The Federal Reserve in the U.S. is largely expected to formalize its ‘new’ monetary policy next week and this coupled with the elections is sure to create a complex soup that may prove a bit too hot for some to swallow.

The JPY and AUD had interesting days. The JPY gained against the USD after the Bank of Japan formally announced that it would make no major policy shifts and stands ready to act after the Federal Reserve moves next week. Investors continue to flock to the JPY for a complex amount of reasons. The AUD proved noticeable as it stayed on the lower side of its recent range even as Gold did find itself inching back to its higher realms. Going into the weekend traders will be presented with a host of opportunities, but the question is all about duration of trade with so many bona fide possible news events and pieces of data that could combine for swift ranges and reversals the next few trading days.

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