Markets in Holiday Mode

With markets still caught in holiday mode, the lack of action in the currency markets today was certainly not surprising. The week between Christmas and the New Year is traditionally a quiet one in currencies, with thinned liquidity and range bound trading as many traders have already packed it all in until they start fresh in the New Year. Today in Asia was a prime example as we saw a skittish AUD/USD slip from 1.0165 to lows under 1.0140 on no news in particular. Conversely, the EUR/USD spent the session on a slow crawl higher as the pair moved from 1.3045 to eventual highs that overtook the 1.3075 level.

With a lack of data or news to trade on, most pairs were contained in monotonous ranges of 20 to 30 pips, with a quick blast higher in the yen at the tail end of the day the only real shocker of the day. While currencies were trapped in small ranges, spot gold, XAU/USD saw a large drop from $1609.00 to $1591.00 over the course of the session, moves attributed to the lack of participants in the metals markets.

Looking ahead be aware that both the UK and Canada will be out later in the day for a continuation of the long holiday weekend. As well, tomorrow in Japan we can look forward to a slew of data out of Japan including CPI, household spending, retail sales and preliminary industrial production.