Tepid start to the week for FX pairs

It has been a very quiet start to the week in the FX space, with limited moves in the major FX pairs. 

AUD/USD is back in the 0.895 region with risk sentiment enduring a choppy start to the week. The stock seems to be lining up for further near-term weakness. There is no data on the local economic calendar over the next couple of days, but Wednesday brings construction work done and private capital expenditure on Thursday. These two readings are always an important feed into GBP and therefore will carry quite some weight for the AUD. While the AUD side of the equation is relatively thin on data, there is quite a bit of activity on the way in the US. Perhaps Janet Yellen’s postponed second testimony on monetary policy to the Senate banking committee will be the highlight of the week, although nothing major is expected to be announced. While there are no other standout releases, investors would want to see an improvement in the housing market and jobs to help lift confidence.

Single currency subdued in Asia

EUR/USD got off to a poor start to the week but has since managed to find some stability at 1.373. The pair gapped lower after having put in a strong performance on Friday. EUR/USD is looking increasingly choppy and will be in focus later today with the German Ifo business climate due out at 20:00 and CPI for the region at 21:00 (AEDT). Any signs of a strong performance on the business climate front should underpin the euro and could see the pair retest 1.376. Should this data disappoint, then EUR/USD could be headed to retest 1.37.

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