Choppy trading in light start to the week

A data light start to the week has seen choppy price action in FX markets, with Asia and European hours seeing strength in USD to weigh against major pairs, before EUR clawed back losses after the Wall St. open. EUR/USD broke back above the 1.1000 level ahead of the European close, with the USD ending European hours in negative territory. Despite EUR seeing late gains against the USD, GBP closed out the European session significantly softer against the greenback, with BoE's Shafik stating that she will not vote for a rate-hike until there is sustained wage growth. This comes ahead of a busy week in terms of UK data, as CPI, unemployment and retails sales data are all scheduled for release later in the week.

Away from major pairs, commodity linked currencies have also seen choppy price action today, with the likes of CAD mirroring the moves in the energy complex whereby Brent and WTI crude futures both saw multi year lows, with the former falling below USD 36.50/bbl and the latter below USD 35/bbl. However, at the NYMEX pit open, oil pared much its losses, with commodity linked currencies following suit, to see the likes of CAD trade relatively flat against the USD, whilst AUD/USD trades in positive territory ahead of the RBA minutes, scheduled for release overnight.

Elsewhere, highlights tomorrow include the Riksbank rate decision, UK and US CPI, Germany ZEW survey, Eurozone employment, US API crude oil inventories and Fonterra dairy auction as well as scheduled comments from BoE’s Haldane.