Away from major pairs, CHF and NOK both weakened against the EUR after the SNB and Norges rate decisions despite both central banks acting as forecast. The SNB kept rates on hold, however Jordon stated that the central bank will continue to intervene in FX markets and the CHF is overvalued, which saw EUR/CHF end in positive territory. Elsewhere, EUR/NOK strengthened by 1340 pips after Norges Bank cut their deposit rate by 25bps to 1.00% from 1.25%, as expected, but went on to state that there is a chance of a further rate cut in Autumn.
Both JPY and AUD gained overnight, with USD/JPY breaking back below the 123.00 ahead tomorrow’s BoJ policy meeting, with reports suggesting that the meeting could see an increase in the number of hawkish dissenters. Elsewhere, AUD benefited from cross-selling in AUD/NZD after the weakest New Zealand GDP reading for 2 years (Q/Q 0.2% vs. Exp. 0.6%, Prev. 0.8%, Rev. 0.7%), seeing AUD/USD break above the 50 and 100DMA to the upside alongside the strength seen in the commodity complex to print its highest level of the month.
Looking ahead, tomorrow sees the Greek saga continue with the ECOFIN meeting scheduled to take place in Luxembourg, while elsewhere tomorrow sees the BoJ rate decision, Canadian CPI and comments from Fed’s Williams (Voter, Dove) and Mester (Non-Voter, Soft Hawk).
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