Quiet data schedule as traders await US payrolls tomorrow
Yesterday we saw the main FX pairs confined to narrow trading ranges. Of the limited moves we did see, the dollar held a slightly weaker tone throughout the European session, dropping by around 0.3% against both the euro and sterling. However, the dollar regained some momentum, reversing its losses following the release of the Fed minutes.
Data-wise, the main release of note yesterday was the ADP employment report for December in the US which at 807k, double the 400k consensus, bodes well for a strong non-farm payrolls release on Friday.
As we get underway this morning, EUR/GBP continues to change hands near the midpoint of the 83-84p range, EUR/USD opens just below the $1.13 level and GBP/USD is operating back at the $1.35 mark.
Data-wise, it is a fairly quiet day in the calendar with German inflation reading for December being the main release of note. It is expected that headline HICP will ease slightly to 5.7% from 6% as effects from the VAT cut a year ago wash out of the annual rate. Barring any major surprises though, expect traders to keep their pencils sharpened for US payrolls on Friday.