The holiday in Japan and also the year-end ensured an extremely quiet Asian session. The dollar managed to regain some losses made after volatile trading on Monday. It saw a low of 118.85 yen after US consumer confidence data printed a lower-than-expected number.
The euro has mostly been trading sideways against the dollar since yesterday’s European session, within a range of 1.2147 and 1.2180. The single currency was not able to benefit too much from broad based dollar weakness as it continues to be weighed down by political uncertainty in Greece and expectations of more quantitative easing by the European Central Bank. The Greek election and ECB policy meeting in January are the immediate key risk events for the euro and there will likely be nervousness surrounding the euro in the build up to these events.
The Australian dollar was the best performing major currency in today’s Asian session. A rise in iron ore prices helped boost the aussie which traded to a session high of 0.8214 versus the greenback. Also helping lend support to the AUD was the HSBC Chinese manufacturing PMI release which came in at 49.6. This was slightly better than the flash estimate of 49.5.
The European session is expected to be quiet as markets in Germany are closed today. In the US session later, US data releases include jobless claims and pending home sales.