FX markets have once again displayed a volatile session following the sharp moves observed yesterday amongst major pairs, with EUR/USD higher by over a point after yesterday’s 200 pip surge. The EUR was bolstered by comments made at the ECB Press Conference by ECB President Draghi, who revised higher the ECB’s inflation outlook for 2015 to 0.3% from 0.0%. Furthermore, the EUR garnered additional support from Bunds after Draghi warned of further volatility to come, which subsequently caused 10y yields to break above 0.8% for the first time since October’ 2014, while EUR/USD also broke above 1.1200 in the process.
The greenback has been pressured in the wake of the broadly stronger EUR, with weaker ISM Non-Manuf. Composite data showing its lowest reading since Apr'14 (May) (M/M 55.7 vs. Exp. 57.0 (Prev. 57.8) consequently sending the USD-index below the 96.00 handle. Elsewhere, UK Service PMI (M/M 56.5 vs. Exp. 59.2 (Prev. 59.5) spurred weakness in GBP/USD sending the pair lower by just shy of a point, however with the USD sharply lower GBP/USD went on to pare most of its losses.
Finally, AUD held onto its overnight gains on the back of a stellar Australian Q1 GDP report, which showed the fast growth pace in a year (GDP SA (Q1) Q/Q 0.9% vs. Exp. 0.7% (Prev. 0.5) with NZD/USD also sitting relatively flat.
Looking ahead, tomorrow sees the release of Australian Trade Balance, Retail Sales, BoE rate decision, US Initial Jobless Claims, EIA NatGas storage change.
The greenback has been pressured in the wake of the broadly stronger EUR, with weaker ISM Non-Manuf. Composite data showing its lowest reading since Apr'14 (May) (M/M 55.7 vs. Exp. 57.0 (Prev. 57.8) consequently sending the USD-index below the 96.00 handle. Elsewhere, UK Service PMI (M/M 56.5 vs. Exp. 59.2 (Prev. 59.5) spurred weakness in GBP/USD sending the pair lower by just shy of a point, however with the USD sharply lower GBP/USD went on to pare most of its losses.
Finally, AUD held onto its overnight gains on the back of a stellar Australian Q1 GDP report, which showed the fast growth pace in a year (GDP SA (Q1) Q/Q 0.9% vs. Exp. 0.7% (Prev. 0.5) with NZD/USD also sitting relatively flat.
Looking ahead, tomorrow sees the release of Australian Trade Balance, Retail Sales, BoE rate decision, US Initial Jobless Claims, EIA NatGas storage change.
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