Article Highlights

  • Japanese banks on holiday today
  • Reuters: Sources say PBoC ready to cut rates again
  • Swiss employment level and German Ifo business climate index due
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Well those weekend gaps got filled pretty quickly! Japanese traders are on holiday today but the lack of liquidity didn’t prevent the major forex pairs from moving around the charts. EUR/USD started off at 1.2363 then popped up to the 1.2400 handle in the past few hours while GBP/USD recovered back above 1.5650.

A news article from Reuters indicated that sources involved in PBoC policymaking hinted that the Chinese central bank is looking to cut interest rates again in order to ward off deflation. Recall that the PBoC surprised the markets last Friday when they decided to lower their benchmark lending rate and deposit rate in order to stimulate lending and growth.

Speculations of further PBoC stimulus seem to be supporting risk appetite so far, as stronger growth prospects in China could spell a better outlook for global economic performance as well. AUD/USD is up 0.13% so far at the .8670 area while NZD/USD is enjoying a 0.22% gain near the .7900 mark.

The forex calendar shows that the Swiss franc and the euro might see a bit more movement in the London trading session, with Switzerland’s employment level report and Germany’s Ifo business climate index up for release. Employment in Switzerland is slated to climb from 4.20 million to 4.22 million, which might allow the franc to recover, while Germany’s business climate reading is expected to dip from 103.2 to 103.0. Weak data from the euro zone could lead to another round of euro selling, after ECB Governor Draghi’s emphasis on their willingness to implement more stimulus if needed.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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