• Australia holds rates unchanged
  • Draghi takes main stage
  • More stimulus for Japan
  • Dollar lower on soft data

Early in today’s session, the Reserve Bank of Australia (RBA) held interest rates unchanged, claiming the central bank feels comfortable with the current stance of policy and developments in China. The Aussie dollar strengthened considerably following the central bankers’ statements and looks optimistic to the upcoming news from China and the global economy.

In Asia, the Bank of Japan (BOJ) has kicked off its two-day monetary policy meeting. The slack in the Japanese economy along with weak growth in industrial production and wages have lead many analysts to believe more fiscal stimulus is coming. Mr. Kuroda, chairman of the central bank, will likely wait until the BoJ’s next meeting, on October 30th, when the bank updates its economic forecasts, before deciding on further QE.

In Europe, Mario Draghi, Europe’s central bank president, is due to speak later today and express his views on current economic developments in the region. This is going to be the main event for today’s session, so stay tuned for the speech today at 1 PM E.S.T.

EURUSD is trading slightly higher this morning, after weak Trade Balance figures from the US disappointed market expectations. This is the second set of weak US data, after Friday’s big miss in payrolls, which continues to weigh on USD performance. The currency pair is also volatile in anticipation of Mr. Draghi’s speech today.

GBPUSD is little changed from yesterday’s levels. Sterling is likely to remain trading flat for the rest of the session, as there is no economic data or commentary due today that would sway the currency pair either way.

AUDUSD maintains the early morning gains, after Australia’s central bank left rates unchanged, meeting market expectations. It will be interesting to see if this positive trend continues, as China is due to release some data at the end of the week.