Forex Flash: Save GBP, Majors edge higher on USD - OCBC Bank

Emmanuel Ng of OCBC Bank notes that save for GBP, majors were up against USD on Tuesday as positive sentiment padded investor confidence with the EUR also mildly underpinned by the better than expected German ZEW.

He continues to explain that by late Tuesday, fairly supportive comments from the ECB´s Noyer on the general improvement in financial conditions and lack of rate cutting urgency, also provided additional life to the common currency. Ng cautions against excessive ebullience towards the EUR in the near term given the potential overhang from the weekend Italian elections, with a fragmented parliament being the ongoing concern.

Laden by dovish rhetoric and economic worries, he notes that GBP however has continued to under perform across the board. Elsewhere, he notes that JPY found interim support after Finance Minister Aso indicated that the government would not instruct the BoJ to purchase foreign bonds as part of its monetary policy. He continues, adding, “Meanwhile, the nomination of the BOJ governor has been delayed by a week, fanning talk of discord between the PM and the Finance Minister over the choice of candidates.” Looking ahead, he notes that the FOMC and BoE minutes may provide more color for the markets with the RBA´s meeting minutes largely non committal .