Currencies steady ahead of data and rate decisions


The forex markets took a pause for breath in the Asian trading session. With the Bank of Japan starting their two day meeting the Japanese Yen remained roughly unchanged against the US Dollar, while trading in a 50 pip range. The Euro, Swiss Franc and British Pound also had a quiet session against the US Dollar. There is very little economic data due for release today, but we do have Messers Poole and Bernanke from the US Federal Reserve speaking later today and Mersch from the ECB. The focus will be tomorrow on the Bank of Japan decision tomorrow. The consensus seems to be that there is unlikely to be a change of policy just before the end of the Japanese fiscal year and any change is likely to be seen in a 6 weeks or so. The Bank of England meets tomorrow, but is unlikely to move on rates. The US will release Trade data tomorrow and employment data on Friday. The Bank of Canada did raise its interest rates as expected yesterday but currency traders were disappointed by the neutral tone of comments after their meeting. The Canadian Dollar continued its slip not helped by falling oil and metals prices. We could see a touch of profit taking by fx traders ahead of the next two days action, but US Dollar weakness will be limited.