European markets were sitting on their hands, awaiting the outcome of the ECB rate decision, later in the week. The ECB is expected to offer rate cuts and further monetary stimulus, to aid the EU economy, which is clearly under pressure. The EU is clearly falling in to recession ,lead by the former powerhouse, Germany. All the economic data coming out of Germany has pointed to a recession and monetary stimulus is needed. The EU has also been buffeted by the Brexit chaos and the outcome becomes crucial to the future of the European experiment. The EUR traded 1.1040, while the GBP drifted to 1.2350, mired in the Brexit mayhem. PM Johnson has refused to request an extension from the 31st October deadline, as legislated by Parliament and called for a snap election, a second time.
The AUD held 0.6860, despite some weaker Business Confidence data released yesterday, while the NZD drifted to trade just above 0.6400. These trade dependent commodity currencies have been boosted recently by the positive developments surrounding US/China trade talks, but remain under extreme economic pressure from their flagging domestic economies.
Markets are currently focused on Central bank action, more particularly, Thursday's ECB meeting. Speculation will continue to drive the narrative unless there are new developments on the US/China trade front.