Daily Market Update 18/03/2008

Forex traders spent Tuesday's Asia session digesting the unprecedented market volatility witnessed over the last 24 hours. Most of the majors saw choppy action during the session. USDJPY spent the session in a tug of war between buyers and sellers which caused the pair to consolidate around the 97.00 handle. The high yielding JPY crosses also dealt in the same fashion, with EURJPY meeting significant resistance into the 153.20s despite an impressive late day rally in New York. AUDJPY spent the session under considerable pressure shedding nearly another 100+ pips from session highs to its lows. The cross finally managed to find some buyers ahead of 88.80.

Although the action slowed from the previous session, EURUSD managed to grind out a decent late session rally, popping higher by 60+ pips, back towards the 1.5800 area. The greenback also saw weakness against the CHF, with USDCHF sliding 70+ pips to the downside to the .9790 area.

Ahead in the upcoming London session currency traders will look to see if the trend continues lower for the USD. On the data front, UK CPI is scheduled to be released which will likely add some dicey price action for GBPUSD, possibly revealing coming moves from the BoE.


Upcoming Economic Data Releases

UK: 0530ET CPI (MoM); Consensus .8%
UK: 0530ET CPI (YoY); Consensus 2.5%
UK: 0530ET RPI (MoM); Consensus .8%
UK: 0530ET RPI (YoY); Consensus 4.2%