FX Roundup: Absence of major data brings mixed fortunes for global crosses

None of the major forex crosses dominated market proceedings on Monday, in the absence of any significant data releases at the start of a new trading week that would see the European Central Bank’s Governing Council convene on Thursday.

At 1523 GMT, the dollar was down 0.10% against the yen, changing hands at JPY113.64. The euro and pound lost ground versus the greenback, posting declines of 0.34% and 0.32% changing hands at $1.0968 and $1.4181 respectively.

Jane Foley, senior FX strategist at Rabobank, said, “Money markets this week will focus heavily on the ECB Governing Council meeting. Despite the very recent upturn in long-term inflation break-evens, we expect the ECB to announce a range of policy easing measures.

"Our base case is for a 10 basis points cut in the deposit rate, an extension of the TLTROs (or an equivalent measure) and an expansion of the quantitative easing program to the tune of 10-20bn per month."

Elsewhere, selected commodity linked currencies gained some momentum during the afternoon session in Europe, but the Canadian dollar was not among them. The greenback notched a modest 0.08% gain versus the loonie to changing hands at CAD$1.3328.

The Australian dollar rose 0.11% against the greenback exchanging at US$0.7447, after data released last week suggested Australia’s real GDP growth was a solid 0.6% quarter-on-quarter in the fourth quarter of 2015, following 1.1% growth - revised up from 0.9% - in the previous quarter.

However, the New Zealand dollar fell versus its US counterpart by 0.35% exchanging at $0.6787.

Kit Juckes, head of forex at Societe Generale, said, “Oil prices can edge up and NOK, CAD and RUB remain on our ‘buy' list. Short NZD/CAD still looks fine to me. Meanwhile, the build-up of long yen positions looks dangerous though.

“If market measures of inflation expectations head higher, and risk aversion doesn't return with a vengeance, the natural trend if USD/JPY is going to be upwards and 120 isn't inconceivable."

Finally, a plethora of other commodity currencies headed marginally higher, particularly in Latin America, with the dollar falling 0.05%, 0.60% and 0.11% against the Mexican, Colombian and Chilean pesos respectively.