Calm Trading in FX Major Currencies, DAX 30 to Record Peak - 21.5.2013

FX markets remained calm in the recent trading as there were not any significant releases and thus major currencies continued in sideways. The most volatile currency pair was the USDJPY that opened lower yesterday, dropped to 102.06 and rebounded to resistance at 102.75 earlier this morning. Bank of Japan would release its monetary policy decision on Wednesday morning and due to uncertainty NIKKEI futures opened lower but eventually closed in positive ground, advancing by 0.13% on Tuesday session.

European shares advanced on Monday with FTSE 100 rising to 6755.63, near record high of 6930, German DAX Futures increased to a record high yesterday at 8455.83, while the French CAC 40 index dropped by 0.28% to 4011.57. The Euro against the US dollar corrected toward resistance at 1.2901 and then fluctuated in sideways area between 1.2901/1.2860 as the greenback eased further versus its major counterparties in the yesterday trading.

Furthermore, the RBA released its meeting minutes of the May 7th monetary decision and indicated that due to "inflation outlook been revised downward" and “growth expected to be somewhat below trend” decided to reduce cash rate by 25 basis points to 2.75%. The Aussie against the greenback dropped greatly since the beginning of May from cap at 1.0380 to downside barrier at 0.9713, losing up to 6.4% in May. Investors are looking ahead for UK CPI and PPI releases as well as on Japan Trade Balance and BOJ Monetary Policy early on Wednesday.