With no significant data today, the currency markets are moving on what was and what might be.
The dollar is mixed in light trading today, in particular losing value to the euro while firming slightly against the yen. The surprise rate cut by the
Bank of Japan
on Friday is still dragging the yen lower today, on the acknowledgement that the cut was largely symbolic, and will have little effect on rejuvenating the weak Japanese economy.
The dollar was recently up just fractionally on the yen, trading at 117.62 from 117.57 at Friday's close. Japanese markets are closed for trading today due to the
National Foundation Day holiday.
Forex is trading within a relatively narrow range today, said John McCarthy, senior vice president of
ING Barings Capital Markets
, and not much movement is expected. The markets are awaiting
Alan Greenspan's testimony before
tomorrow. His report should "give us a bit of a clue on what he's done so far -- the two 50 basis point rate cuts -- and what he sees coming down the pike," McCarthy said.
Noting the upward trend of the euro in recent months, largely due to the U.S. economic slowdown and speculation on a growing disparity between the U.S. and euro zone economies, McCarthy said he believes that Greenspan's speech will clarify for the markets "how deep the U.S. slowdown will be, and how it will effect Europe."
McCarthy continued that he believes "the market got a bit ahead of itself -- it was too optimistic about the euro and too bearish about the U.S. slowdown," and so the recent stall in the euro's climb toward parity is validated by uncertainty about the euro zone's ability to remain unaffected by the slowdown in the United States.
Belgian Finance Minister
said this morning that the euro zone retains a "realistic confidence" about the strength of the euro and the growth of the euro zone. Despite this, or likely more so due to the wariness about the euro zone's ability to remain isolated from the economic slowdown in other major economies, the euro is moving very little today.
The euro was recently trading at $0.9289, up from $0.9245 at the close of trading on Friday. The euro reached one and a half-week highs against the yen today, making a step up to 109.03 yen per euro most recently, from a close of 108.61 yen at yesterday's close.
Following today's euro drive upwards, the Australian dollar is firming against the U.S. currency also. The Aussie buck was recently at $0.5371, up just slightly from yesterday's close of $0.5362.
The British pound is also making minor gains against the U.S. dollar today. The pound was recently trading for $1.4512 from $1.4431 at Friday's close.
The Canadian dollar is slipping against the U.S. currency today, as the U.S. dollar was recently at C$1.5134, up just a bit from the last close of C$1.5102 on Friday.