The GBP was Lower Against EUR and JPY Overnight Dropping Sharply, USD Strengthen Against JPY and EUR

Hello folks, GBP's safe haven currency was lower against the Euro and the JPY overnight dropping sharply through key support levels. The pound's moves against the higher yielding currencies were more tightly held opening lower against the AUD and NZD at 1.6890 and 1.9225. Key direction for the sterling will come from the Bank of England rate decision tonight but caution still remains over the looming US debt situation. 

Majors currency latest update:

Meanwhile, We find currencies a bit mixed this morning after a somewhat eventful night that saw the greenback strengthen against the yen and the European majors but fall against many of the higher yielding currencies. News that Obama has nominated Janet Yellen as the next head of the US Federal Reserve actually lifted the US dollar despite the fact that she is seen as a dove when it comes to monetary policy and is expected to carry on similar principles to her predecessor.

With all the uncertainty in the market at the moment, it appears investors were keen to buy into anything that removes one of the unknowns, in this case who will take the reins at the end of January when Bernanke steps down. Also helping to lift the greenback late in the session was the release of the Fed minutes from September which showed that despite deciding not to taper last month, the majority of policy makers were in favour of some form of tapering by the end of the year. Given what has happened since then, in terms of the shutdown and approaching debt ceiling, their view may differ somewhat at the next meeting and this did keep the greenback's gains somewhat subdued. USD/JPY moved higher along with equities to briefly trade above 97.50 and we currently find it at 97.35 while EUR/USD dipped briefly below 1.3500 and is currently at 1.3520.

Data releases:

AUD: MI Inflation Expectations, Employment Change, Unemployment Rate
NZD: Business NZ Manufacturing Index
JPY:  Core Machinery Orders, Tertiary Industry Activity, Bank Lending, 30-y Bond Auction, Consumer Confidence
GBP: Bank of England Asset purchase and bank rate decision, MPC rate Statement
EUR: ECB President Draghi Speaks, French and Italian Industrial Production, ECB Monthly Bulletin,
USD: Unemployment Claims, Natural Gas Storage, 30-y Bond Auction

Source: ozforex