,, Decreased volatility creates pressure for major currency pairs

Decreased volatility creates pressure for major currency pairs

25 / 10 / 2016 | Notizie sul mercato
A relative lack of data over the last 24hours has seen volatility evaporate from a number of key pairs. EURGBP and EURUSD have both traded in narrow 30pip channels, whilst the brief dip we saw in USDCAD came in the wake of comments from Canada’s central bank over the nation’s interest rate outlook – although a quick clarification served to largely correct this. We do however have a trend established on USDJPY, although this seems to be about the prospect of another miss in terms of Japanese inflation being priced in ahead of the event.
 
Looking ahead, the fundamentals remain very thin on the ground in this morning’s European session, so again volatility is likely to prove difficult to find. Later in the day we do have speeches from both Mark Carney at 3.35pm BST and Mario Draghi at 4.30pm BST so these will be under some scrutiny. Given the lack of activity, the reaction here could be pronounced - even if it is rather short-lived.
 
Data out of the US this afternoon is relatively low level although we do have a consumer confidence indicator at 3pm BST. This is tipped to drop from 104.1 last month to 101 for October, so the greater risk here could be on the downside. Certainly anything below 100 could knock dollar strength as it has the potential to just raise a modicum of doubt – which will probably be rather short-lived - over a December hike from the Fed.

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