Market trading was exceptionally subdued as investors await the policy announcements from several of the world’s major central banks, including the Reserve Bank of Australia, the Bank of Japan and the European Central Bank. The U.S. Dollar Index remained below a recently struck 10-1/2 month high while market volatility eased back. Analysts say that the U.S. Dollar outlook remains constructive for dollar bulls, especially against the Japanese Yen, and for dollar bears against the EUR/USD.
As reported at 11:51 a.m. (JST) in Tokyo, the EUR/USD was trading at $1.3421, maintaining a tight trading range of between $1.3409 and $1.3433; the pair remains within striking distance of last week’s 8-month low. The USD/JPY was also range bound, trading at 102.56 Yen while the EUR/JPY was trading at 137.70 Yen. The U.S. Dollar Index traded at 81.320 .DXY, at the low end of a trading band within 81.287 and 81.382.
Aussie Dollar Future Policy in Focus
The Australian Dollar managed to move higher against the U.S. Dollar as traders awaited an early morning decision from the RBA. The central bank is expected to maintain the status quo with a cash rate of 2.5% but traders will be curious to see learn if the RBA governor hints at any possible policy changes in the future given the several improvements to the Australian economy. The AUD/USD struck a peak at $0.9337, moving away from last Friday’s 2-month low at $0.9275.