Investors on the Sidelines Awaiting ECB Action?

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Market sentiment still awaits any action from the European Central Bank in order to lower Spanish and Italian borrowing costs. Will markets see little change until the see the action?

The U.S. dollar saw little change against the Japanese Yen today with market sentiment still expecting action from the ECB to cut Spanish and Italian borrowing costs. The pair hit the session high of 78.30 during late Asian trade.

Good news for Switzerland

Official data released from the Swiss Federal Statistical Office showed that Swiss consumer price inflation dropped less-than-expected last month. Analysts has expect it to drop to -0.6% from -0.3% in the previous month, however data showed it fell to -0.5%. Switzerland also released data showing that the unemployment rate stayed the same as last month. As expected by analysts, the unemployment rate remained the same at 2.9%.

Gold futures bounced back and forth this morning as investors hold back, waiting on expectations for ECB action. Gold futures traded at USD1,613.85 during early trade, dropping 0.02%.

Good news for the Aussie dollar

Data released today showed the Reserve Bank of Australia kept interest rates unchanged, sending the Aussie dollar close to a five-month high against its U.S. counterpart. The pair hit 1.0601 in late Asian trade, the highest since March 20. The RBA decided to keep its interest rates at 3.5% as expected. Since the last interest rate cut in June, the Aussie dollar has gained strength against the U.S. dollar. The Aussie dollar was also higher against the euro, with the EUR/AUD pair dropping 0.17%.

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