EUR/USD - 1.1605.. Euro moved narrowly but with a soft bias in relatively subdued Asian morning after Wednesday's volatile trading in New York session. Despite intra-day fall from 1.1598 (Europe) to 1.1563 following upbeat U.S. data esp. record rise in ISD non-mfg index, price jumped in post-FOMC when Fed released its statement n restated its belief that current high inflation is "expected to be transitory", this triggered broad-based selling in the greenback as market was long USD ahead of FOMC.
Although Wednesday's rebound from 1.1563 to 1.1616 suggests further choppy swings above last Fri's 2-week trough at 1.1535 would continue until release of Friday's U.S. NFP, further strong rise above 1.1616 is unlikely to be seen as current rising U.S. yields should lend support to usd.
Bids are noted at 1.1590-80 with stops below 1.1560 while offers are tipped at 1.1515/25 with stops touted above there.
Today is PMI day in the euro area countries, please refer to our EI page for details and pay attention to German and the EU's Markit services PMIs.
We also have a number of ECB officials scheduled to speak n ECB President Lagarde will speak at a conference at 12:45GMT.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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