The US Dollar edged lower in European trading after a disappointing Tankan survey, a report which shows business sentiment in Japan, which paradoxically gave the safe haven Japanese Yen a boost even as it weighed on Japanese equities. Meanwhile, an improvement in economic data from China did help to support commodity-linked currencies such as the New Zealand and Australian Dollars. In the Eurozone, a better-than-expected reading of PMI reports from the Eurozone’s economic drivers, e.g. Germany and France, provided the Euro with some limited support.
As reported at 8:26 am (GMT) in London, the USD/JPY was trading at 119.83 Yen, a loss of 0.2% for the Dollar and with safe haven demand whetted, the EUR/CHF fell to 1.0422 Swiss Francs. The EUR/USD was trading at $1.0782, a gain of 0.2% for the Euro. The AUD/USD had risen to a session high of 0.7622 before retreating to 0.7591, while the NZD/USD pair traded at 0.7410 down from a session high of 0.7491.
Uncertainty Ahead for Dollar and Euro
In thin trading the week, analysts say that FX traders are simply biding their time until Friday’s US labor data release when some uncertainty on the US Dollar direction is likely to wane. Moreover, they point out that thin trading has contributed to an increase in volatility but even after the Easter holiday, uncertainty will prevail, at least for the Euro, until the Greek problem is finally settled.