EUR positive data stands out in actionless Monday
|Little to gauge from Monday’s session, but EUR positive data stands out. No respite for CAD, but GBP pressure perhaps starting to ease off a little – in the near term at least.
Little to gauge from the FX price action seen today, but the bullish USD tone looks to have eased off a little, except for USD/CAD which continues to press for higher levels through the mid 1.3300’s with limited pullbacks. The dovish stance at the BoC is largely behind the turnaround in sentiment here, having accelerated the rally from 1.3000 last week. Oil prices are also struggling to build on recent gains, so this continues to add pressure on the CAD. AUD and NZD have also weakened in recent sessions, but focus will be on the former with key inflation data out midweek to measure against/alongside the disappointing jobs report last (week). USD/JPY continues to look well supported on any notable dips into the low 103.00’s, but despite steady stock markets, selling interest from the low-mid 104.00’s is making the upside progress sluggish at best. Onto the EUR, and better than expected PMIs EU-wide (strong in Germany), having given the single unit some much-needed relief. Early on we saw a test on 1.0850, but having held off the figure level, we look more inclined to test back through 1.0900 again. From the USD perspective, Fed’s Bullard was not as aggressive in his rate hike views as we have seen in the past, while Dudley declined to comment on policy. This could add to a push back up towards 1.1000, and this may well be generated by the German Ifo report out tomorrow morning, if the survey follows the recent data series. For GBP, we sense the doom and gloom-mongers are having less of an impact at current levels. EU’s Juncker has ‘moved on’ from a soft or hard Brexit, to a dirty Brexit, but with so much negativity priced in, the downside in Cable is looking tired – in the near term at least. EUR/GBP has adjusted to a tight range lower down, with .8850 the base. CBI industrial trends orders were notably weak today, but this will have surprised few. UK GDP later in the will have a much greater impact, perhaps more so the growth stats in the US, with Fed rate hike considerations clearly the lead driver of trade.
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