RTTN:Euro Lacks Clear Direction Before Key US Data
Absence of adequate macro-economic triggers led the euro wavering in early deals on Tuesday, but some key U.S. economic data pertaining to housing starts, home prices and consumer confidence due later in the day might provide some trend shifts in the upcoming session.
With the economic docket remaining empty for the second consecutive day in Europe, traders continued to mull the ECB Governing Council member Jens Weidmann's remarks on Monday that the European Central Bank's role as the euro area banking supervisor should not be permanent.
ECB's decision-making body or the governing council should not be part of the banking supervision, Weidmann, who also heads the German central bank, said in a speech at Harvard University. "If this avenue is not taken, an independent supervisory institution will become necessary, in my view," the official was quoted as saying.
"Rather than for monetary policy to waltz with fiscal and financial policy, we need to erect walls between banks and sovereigns," Weidmann said.
A survey results from the Confederation of British Industry revealed that the U.K. service sector firms are feeling bullish about their prospects following a second successive quarter of solid growth in activity.
According to the survey, optimism across the sector as a whole increased at the strongest pace since the start of the survey in 1998, while business volumes rose at the quickest rate since November 2007.
Elsewhere, members of the Bank of Japan's monetary policy board stated that the country's economic growth would accelerate in the second half of fiscal year 2013, minutes from the board's October 31 meeting revealed. But the members cautioned that the country's economic growth rate would slide considerably in fiscal year 2014.
While noting that a high degree of uncertainty remains over mid-to-long-term inflation, the board added further that the economy is following the path to the 2 percent inflation target at a moderate pace.
At the meeting, the BoJ kept interest rates unchanged at 0.10 percent, and it also said it will keep the target for the monetary base expansion at an annual pace of JPY 60-70 trillion.
The euro slipped to 1.3537 against the US dollar around 5:30 am ET, retreating from a 6-day high of 1.3570 hit a couple of hours ago. Although the euro-greenback pair is staying under its 50-day simple moving average level, it remains well above its 100-day and 200-day SMAs and the RSI is holding bullish suggest an upswing towards a major resistance around the 1.38 area in the medium-term.
The euro eased to 0.8366 against the pound around 5:40 am ET from Asian session's 6-day high of 0.8382. Failure to break the key 0.83 support during last week's corrective sell-offs and a subsequent rebound suggest the currency cross may challenge the 0.84 level in the near-term.
The single currency showed some improvement against the yen from yesterday's overnight sell-offs, but the pair is still keeping distant from yesterday's failed test of 138.0 resistance, its fresh 4-year high. The euro-yen pair has been trading in a range between 137.68 and 137.28 in early deals.
The European shared unit oscillated in familiar ranges against the Swiss franc, with the peak challenging yesterday's 5-day high of 1.2330 and the bottom reaching around the 1.2310 level. The Swiss National Bank President Thomas Jordan's overnight remarks that the central bank has no plans to alter the EUR/CHF minimum exchange rate as it remains indispensable to ensure price stability in Switzerland failed to influence the pair today.
