EUR/USD
Overnight, EUR/USD saw a modest move higher, with some analysts paying attention to the news that Fitch reaffirmed Germany at AAA after market on Friday, although this came amid particularly light overnight volumes with Japan away from market. However, when Europe came to market, the pair was pushed lower as participants focused on geopolitical concerns surrounding the Russia/Ukraine situation. This saw prices ebb lower with further downside stemming from news that the Bundesbank see German growth stagnating in Q2. Nonetheless, the pair remained well supported by talk of Asian bids ahead of the 1.3500 handle, where there was also an option barrier. Thereafter, the pair saw relatively muted trade with a distinct lack of tier 1 data or economic commentary for the remainder of the session, with the calendar suggesting this could be the same case for tomorrow.
GBP/USD
Ina similar nature to EUR, GBP was provided a lack of direction amid particularly light newsflow. The pair was seen slightly softer after UK Rightmove house prices showed the first price fall in 2014 in the month of June, although the move lower was largely dictated by the stronger USD as geopolitical concerns continue to dictate price action. For the remainder of the session, the pair traded in a relatively rangebound manner with a lack of catalysts to dictate price action. Looking ahead, attention turns to this week’s BoE minutes release, focus for the minutes will be placed upon any hawkish rhetoric from various BoE members with Weale and McCafferty the likely members to have potentially leaned towards the idea of a rate-hike.
USD/JPY
Overnight, the pair was restricted to particularly rangebound trade with Japan away from market due to a public holiday and as such newsflow from the area was inevitably thin. Nonetheless, the pair saw a modest bout of downside with JPY benefiting from the cautious sentiment amid reports that further EU sanctions on Russia are to be discussed on Tuesday. This came after Western briefings said the downing of MH17 in eastern Ukraine was a mistake, with pro-Russian separatists and Russian military personnel behind the shooting of a surface-to-air missile. However, the USD/JPY pared these modest losses with a lack of new pertinent developments in the Ukraine/Russia situation to fuel price action. Looking ahead, tomorrow sees the return of Japan to market and thus may see a pick-up in Asia-Pacific newsflow, although participants will be keeping a firm eye on any geopolitical developments that could provide the pair with some momentum.
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