Euro Steadies Ahead of EU Uncertainty, Aussie Slips Post CPI

Awaiting EU Summit, Aussie drops on rate cut expectations after Aussie CPI, UK CBI orders set to improve, US durable goods could well disappoint. Premium Trades remain progress, with the shorts in AUDUSD & AUDCAD few pips away from hitting all targets. See more below.

The focus of the day remains the outcome of todays EU leaders meeting following the cancellation of yesterdays ECOFIN meeting. Angela Merkel has an appointment with the Bundestag this afternoon where ratification is required of the latest changes to the EFSF and the decision to use leverage to increase its firepower to 1trn.
Differences still remain about the size of Greek haircuts or PSI and there is a chance that we may not get a final decision on that today. There is also uncertainty about the position of Italy PM Berlusconi as he tries to raise the pension age to 67 against stiff opposition within his own party. This could well precipitate the fall of the Italian government which would add another layer of delay and uncertainty to the proceedings.

Aussie rallied strongly in the past couple of weeks as fears about a hard landing in China have slowly diminished. In the wake of this weeks lower than expected New Zealand CPI numbers it wasnt much of a surprise to see Australian CPI data come in similarly lower in line with expectations. The quarterly number slipped back from 0.9% to 0.6%, while the year on year figure slipped back from 3.6% to 3.5% and keeping the door open for a rate cut.

In the UK, the latest CBI industrial orders data for October is expected to show that the UK economy continues to be moribund, with expectations of a slight improvement from -9 to -7.

In the US and the wake of yesterdays rather disappointing consumer confidence figures, hitting their lowest levels since March 2009, US investors will be hoping for some improvement in September durable goods orders, however this could well be misplaced.
As a result of all the aforementioned uncertainties, gold jumped by more than $50 rising above $1,700 an ounce for the first time in over a month.