EUR/USD remains trapped within a narrow trend channel
|Currencies
EUR/USD remains trapped within a narrow trend channel. A break higher would probably require improving European data.
The pound sterling further erased pre-election gains as markets shifted focus to the potential difficult trade talks with the EU. The move ran into resistance near EUR/GBP 0.86. The Bank of England might decide over sterling’s near term future by the end of this month.
USD/JPY settled above 110 amid an overall constructive sentiment. The fall-out of geopolitical tensions at the start of the year on USD/JPY (rising yen) proved very short-lived.
The Czech currency enjoyed a nice bid on the back of improved sentiment, a solid economy and relatively high interest rates. EUR/CZK 25.00/15 is key support.
The Hungarian forint remains close to historically weak levels. High inflation (4%) turns real interest rates negative, hurting the currency.
Polish zloty rallies as markets bet the central bank will raise rates sooner than later with inflation running high. EUR/PLN 4.24 is an important technical reference.
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