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A significant slip in the euro was perhaps the most interesting move as traders reacted to a raft of disappointing PMIs. EUR/USD was trading at around 1.376 but dropped to 1.369 after services and manufacturing PMIs for France, Germany and the region fell short of expectations. The only reading that beat estimates was Germany’s flash services PMI which came in at 55.4 versus 53.4 expected.
EUR/USD has just been holding above 1.37 in Asia today with a lack of catalysts to sway the pair in either direction. The economic calendar is quite bare today with nothing to look out for the single currency.
However, in the UK we have retail and public sector net borrowing due out. Traders are expecting another strong month of consumer activity. A reading above 5% ex-auto (annualised) could see cable push back to the recent high of 1.6823. On the USD front we have existing home sales due out and it would be good to see a positive print here after the disappointment in housing starts and building permits earlier in the week.
AUD/USD oscillating around 0.90
AUD/USD seems to be stuck in a range now with 0.90 being the midpoint. The pair bounced off the 0.894 level and is now back at the 0.90 mark. While the improvement in risk in US trade is the likely driver of this recovery, perhaps there is a general consensus that fair value for the pair is at the 0.90 mark given current fundamentals. With the RBA adopting a more neutral bias, traders are struggling to commit to a direction. As a result the range between 0.89 and 0.908 just continues to hold. There is no Australian data due out today but traders will continue to monitor events in China after yesterday’s disappointment.