Currencies consolidating after yesterday's big moves

The drop in the US dollar finally came to a halt with the US dollar index stabilising just under 83.

Risk currencies and the yen gave back some ground to the greenback after having rallied sharply yesterday. EUR/USD retreated to lows in the 1.30 region before finding buyers as volatility ramped up on recurring Portugal and Greece issues.

AUD/USD retreated quite sharply from its Asian trade highs and is back in the 0.92 region. On the local economic calendar today we have home loans data due out, with a 2.3% rise expected. This reading tends to be a significant indicator of domestic sentiment and affects a wide range of sectors in the domestic economy as most families’ wealth is highly correlated to property.

USD/JPY also seems to have found some stability and is hanging around the 99 level ahead of today’s Asian trade. Over in Japan we have industrial production data along with the BoJ monthly report due out. In US trade we get the latest read on consumer confidence and investors will be hoping to see a continuation of the recent recovery. This would in turn spur the USD higher in the short term.

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