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The pair continues to hold its ground above 100 ahead of the conclusion of the BoJ meeting. FOMC minutes didn’t quite make any difference to sentiment and I suspect this is due to how stale they were. While members generally felt tapering isn’t warranted, we’ve also had a raft of Fed members speak recently and reinforce that idea. USD/JPY will be the pair to watch today with the BoJ due out. While no additional stimulus is expected, the discussion certainly might happen due to the upcoming sales tax hike. There will also be more Fedspeak later today with Powell, Lacker and Bullard on the wires along with unemployment claims data. To the upside, September highs in the 100.61 region will be the level to watch while a drop below 100 could signal near-term weakness.
The AUD will be in focus once again today with Glenn Stevens delivering a speech titled ‘The Australian Dollar: Thirty Years of Floating’. We have heard increasing jawboning recently, but what remains a mystery is exactly how the RBA could intervene without lowering rates. As a result, this speech might flesh out some detail which could drive AUD/USD weaker. Today we also have China’s HSBC flash manufacturing PMI reading due out at 12.45 AEDT with the market looking for a flat reading of 50.9. Traders could eye support in the 0.93 region.
The single currency lost ground to the greenback on the back of the FOMC minutes and a headline that the ECB is weighing a -0.1% deposit rate if more easing is needed. This saw EUR/USD slip below 1.35. Later today we have a raft of PMI releases which have the potential to cause further volatility for the pair. The main ones to look out for will be German and French manufacturing PMIs. Any disappointment in these readings could result in further near-term weakness for the euro.
WOR was sold off drastically yesterday on the back of a profit warning. We could see some follow-through selling today with downgrades starting to roll in as well on the stock. The stock has been downgraded to neutral (from outperform) by Credit Suisse and I’m sure there are more on the way. Potential support for the stock is in the $15 region.