Major currencies were in consolidation mode overnight, drifting sideways in narrow ranges against the US Dollar, as another lacklustre set of economic data gave traders an opportunity to digest the recent volatility. A similarly uneventful set of scheduled risk events in European trading hours put the spotlight on the speaking docket today, as a series of European Central Bank officials take to the wires. The Australian and New Zealand Dollars narrowly outperformed, as periphery Euro zone yields corrected to modestly lower levels - triggering mild relief in traders' risk aversion. Traders will be mainly focussing on from ECB President Mario Draghi and German Bundesbank President Jens Weidmann, and they'll be hunting for guidance on the evolution of the central bank’s position on taking up the role of a true lender of last resort for the Eurozone. The markets have been pining for this, in the hope that policymakers will openly offer a backstop for debt-strapped members of the currency bloc by pledging to use the strength of their balances in an effectively-unlimited capacity, to purchase bonds and cap sovereign yields. Such an action would buy afflicted Eurozone member states the time they need to reform their budgets and implement austerity measures. The ECB has leaned on its narrow mandate to provide price stability as a way to avoid outright QE so far. Investors are thus keen to get a reading on the degree of pain that bond markets will have to inflict on Eurozone sovereigns, before the monetary authority will begrudgingly step into the breach. With that in mind, Mr. Draghi’s comments ought to be very potent, as they'll presumably represent the position of the bank as a whole. Any noticeably stark contrasts between his position and that of Mr. Weidmann – an ardent critic of ECB intervention into bond markets – will be interesting to monitor, in that it'll reveal any widening of the already-emerging rift between Germany and the remainder of the currency bloc. Needless to say, any indication that the ECB is inching closer toward a more aggressive support role would naturally prove supportive for the Euro, as well as for risk appetite at large, weighing on the USD against its sentiment-linked counterparts. Alternatively, a clear message ruling out more forceful actions from the central bank - or hints that the subject is fanning the flames of dissent among officials - is likely to have the opposite effect.

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