Currency Updates:
Increased market concern over a Greek exit did not help volatility over the Asian session today. USD remains steady as market participants await the most important FED meeting of the year so far, tomorrow at 18:00 GMT.
AUDUSD struggled to hold on to its gains in the Asian session after the RBA minutes showed RBA is concerned regarding the strength in the AUD. NZDUSD continues to be under pressure as investors await the FOMC rate decision after RBNZ surprised markets by announcing a rate cut last week.
USD: A strong employment report last month as well as an increase in wages have raised speculation that the FED will raise interest rates for the first time after 56 meetings (or 7 years) as early as September. This has kept investors hanging from the lips of FED chairwoman Janet Yellen, who is scheduled to speak and give clues about future monetary policy right after the FED rates announcement at 18:30 GMT.
However, a hawkish statement is far from guaranteed and it is for this reason most fund managers and traders are reluctant to take big bets prior to the above risk event.
As far as Greece is concerned, if saved from an exit the EURO might rise, but if not the EURO will possibly slide. For now the most probable range remains 1.10 to 1.15.
Heading into the European session, the financial calendar offers CPI readings for May as well as a bundle of data at 08:30GMT for the UK. US housing starts at 12:30GMT is the most important data event into the US session.
Trading quote of the day: “Only when the tide goes out do you discover who’s been swimming naked” Warren Buffet
