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FX markets are fairly flat in Asia, with most of the week so far having been characterised by a fairly mixed performance against on the majors. The CAD has been the main source of strength so far this week, closely followed by the kiwi NZD. In contrast, we have seen the euro slipping gradually throughout most of the week. Some of this is in anticipation of next week’s policy meeting, with thoughts turning once again to fresh signals of possible policy action from the ECB after the disappointment of this month. But the chances of this have diminished so the downward drift in the euro should be modest as a result. The Aussie also has to be mentioned, having just pushed the 0.93 area in overnight trade, further proving its resilience, both in absolute terms and also in relation to events in China during the course of the month.

As we’ve warned before, month end brings with it risks of increased volatility, which remains a risk for today ahead of Monday’s final trading day of the quarter. Ahead of that, there are a fair few distractions on the economic calendar. Final GDP data in the UK should not impact sterling, but will be of interest for the final details (economy grew 0.7% in Q4). We also have Eurozone business and consumer confidence data at 10:00 GMT, ahead of second tier US data in the form of personal income and spending data, together with final Michigan confidence numbers.

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