Dollar took a snooze pill last night

It was the Beige book that dropped off someone the dollar steam and weakened the dollar.

The beige book suggested that there has been some slowdown in economic activity. But I think it was a temporary retracement situation.

USD/JPY dealt down to 83.34 which is the lowest since 1995! However it didn’t stay down there for long and rebounded back up to 84.05. There is talk of potential intervention, so let’s see whether that happens or not.

We did see Euro recover a little last night after the Portuguese auction went well, but I still think markets are looking down though with Euro overall.

Sterling rose up after the Halifax house price index increased to +0.2% and also the better than expected production data. But today is another story, sterling is back at the levels it was yesterday. The question is, should I enter a sell position again at these levels?

Aussie rallied to it might and popped above 0.9200 after home loans increased by 1.7% and the unemployment rate data which come out better at 5.1%. We do see it ranging today, I’d look to buy at any retracements lower.

Data Today

German CPI – 6am GMT                  

UK trade balance – 8.30am GMT                             

BOE rate decision and asset purchase target - 11am GMT

US trade balance – 12.30pm GMT

US initial jobless claims – 12.30pm GMT